Services Provided By Different Private Banks
1.1. Introduction
Banking system occupies an important place in a nation’s economy because of its intermediary role; it ensures allocation and relocation of resources and keeps up the momentum of economic activities. In a developing country like Bangladesh the banking system as a whole has a vital role to play in the progress of the economic development.
Banks these days provide a variety of services. They provide both short-term and long-term credit. Their customers come from all walks of life from a small business to a multi- nation corporation having its business activities all around the world. The banks have to satisfy the requirements of have therefore become complex and require specialized skills.
Every bank has different division and every division has units or department and every department has their own function to serve the customers according to customer’s requirement. The departments are:
· General Banking Department
· Cash Department
· Foreign Exchange Department
· Credit Department
· Customer services department
1.2 Objectives
The main objective of this report is to show the services offer by different private sector banks of Bangladesh and evaluate the performance of the customer services in different sectors of Bank. This report entitle “Customer Services in Banking Sectors of Bangladesh” originated from the partial fulfillment of the dissertation. Some of the important objectives of the study are as under:
· To analyze the performance of customer services which are provided to the customers as well as their satisfaction with the services of private commercial banks of Bangladesh.
· To find out the problems of customer services of different banks.
· To know the way of providing better customer services in banking sectors.
· To suggest some recommendations regarding better customer services
1.3 Scope of the Study
The Dissertation gives us a great opportunity to get the difference and similarities between the practical and the theoretical world. Another scope is to know about the rules, regulations, and overall banking environment of Bangladesh.
1.4 Methodology
This research of which major objective is to describe the comparative study of customer service quality. This study is a single cross sectional design where preliminary information is gathered only from the existing clients (account holder) of Dutch- Bangla Bank Limited, Prime Bank Limited, the Premier Bank Limited, National Bank Limited and BRAC Bank Limited to whom the quality of services is being provided and how well the customers are accepting the services. The information about the provided services has been collected from the officers related with customer service department of different Banks. Maximum data of this report has been collected from face to face interview and annual reports of banks.
Sources of data
The project part is prepared on the basis of both primary and secondary data
Primary Source of Data Collections is:
· Face to face conversation with the bank officers and with the Customers.
Secondary Source of Data Collections is:
· Annual report of Dutch-Bangla Bank limited, Websites.
· Different publications regarding banking function.
1.5 Time Schedule
The timeschedule of this dissertation is only three months . But proper planning and doing works strictly according schedule made it possible to complete the dissertation in the specified time frame. The allocation of time is shown as below:
| Description of Works | – | Allocated Time Frame |
| Data collection | – | 20 days |
| Literature Review | – | 25 days |
| Analysis of Data and findings | – | 30 days |
| Report preparation | – | 15 days |
| Total time | – | 90 days |
1.6 Limitations
Like all survey works this research is subjected to a number of limitation. These are:
· Bank secrecy posed a major problem since discloser of some information’s been restricted.
· Sufficient records, publication, facts & figures are not available. These constrains narrowed the scope of real analysis.
· Even I did not get the available information also.
· However, I have tried to prepare my dissertation report as good as possible within these limitations.
· The time, 120 days, is insufficient to know all activities of the branch and prepare the report.
· Because of the limitation of information, some assumption was made. So there may be some personal mistake in the report
Profile of Banking Sector in Bangladesh
2.1 History of Commercial Banks in Bangladesh
Banking industry has been in a state of dynamic change that is rapidly transforming the role of the commercial banks in the financial system. The 1990’s where the period of dramatic transition in which the nature of banking industry had changed more rapidly than at any other time in its history. Deregulation, electronic data processing, and telecommunication have altered the competitive environment for the banks. The number of banks in all now stands at 49 in Bangladesh. Out of the 49 banks, four are Nationalized Commercial Banks (NCBs), 30 local private commercial banks, 10 foreign banks and the rest five are Development Financial Institutions (DFLs).
Sonali bank is the largest among the NCBs. Among the 10 foreign banks, standard chartered has become the largest in the country. Besides the scheduled banks, Samabai (Cooperative) bank, Ansar-VDP bank, Karmasansthan (Employment) Bank and Grameen bank are functioning in the financial sector.
Bangladesh Bank (BB) regulates and supervises the activities of all banks. The BB is now carrying out a reform programme to ensure quality services by the banks. Each bank, though, controls all aspects of their own banking process. From dealing with customer credit lines and loans, to handling international investments, each bank works within itself and competes with other banks for the greatest amount of investment, consumers, and, therefore, profit. The consumer became more important to bankers’ success; the banking industry focused more on the well being of the consumers and expanded their long-term goals to include the happiness and satisfaction of the consumer. In other words, the consumer plays one of the most vital roles in our economy. Because of their ever- changing wants and needs, banks are willing to change and innovate their0 services to satisfy more people.
In the backdrop of economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of floating commercial banks with different outlook. For them, it was competence, excellence and consistent delivery of reliable service with superior value products.
2.2 Objectives of Private Commercial Banks
Commercialbanks aredesigned to provide commercial investment bank service to all type of customers ranging from small entrepreneurs to big business firms. In this regard, it gives emphasize on the priority sector of the economy like industry, housing and self- employment. Besides, the bank aims to provide different customer friendly deposit and loan products to fulfill the banking needs of the individual customers.
2.3. The Vision & The Mission of Commercial Bank:
The Vision:
Commercial Bank in Bangladesh in terms of
Efficiency
Capital Adequacy
Asset Quality
Sound Management &
Profitability having strong liquidity.
The Mission:
To build Commercial Bank into an
Efficient
Market Driven
Customer Focused Institution
with good corporate governance structure
Continuous improvement in
Business Policies
Procedure &
Efficiency through integration of technology at all levels.
2.4 The Strategic Priorities of Commercial Banks
· To have sustained growth, broaden and improve range of products
and services.
· On delivery of quality service in all areas of banking activities with
the aim to add increased value to shareholders investment and offer highest possible benefits to the customers.
2.5 Function of Commercial Banks
Deposit Mobilization
Bank is the largest mobilizes of surplus domestic savings. For poverty alleviation, we need self-employment, for self-employment we need investment and for investment we need savings. In the other words, savings help capital formations and the capital formations help investments in the country. The investment in its turn helps industrialization leading towards creation of wealth of the country and the wealth finally takes the country on road to progress and prosperity. As such, saving is considered the very basis of prosperity of the country. The more the growth of savings, the more will be the prosperity of the nation.
The savings rate in Bangladesh is one of the lowest in the world rate of domestic saving being 17.78%. In order to improve the savings rate, Financial institutions responsible for mobilization of savings should offer attractive savings schemes so that the marginal propensity to save increases. The savings do not, of course, depend only on the quantum of income but largely depend on the habit of savings of the people.
Most of the commercial banks formulated the following Savings Schemes
o Saving Deposit Account
o Current Deposit Account
o Short Term Deposit Scheme
o Contributory Saving Scheme
o Fixed Deposit Scheme
o Double Benefit Deposit Scheme
o Monthly Benefit Deposit Scheme
o Lakhopati Deposit Scheme
o House Building Deposit Scheme
o Millionaire Scheme
Income tax on interest amount shall be as per Government rules on taxation and the Bank reserves the right to deduct Income tax.
Loan Scheme:
Commercial Banks has formulated the following Loan Schemes
# General Loan Scheme
# Consumer Credit Scheme
# Lease Finance
# Hire purchase
# House Building / Apartment Loan Scheme
# Advance against Share
# Small and Medium Enterprise (SME)
General Loan Scheme:
Depending on the various nature of financing all the lending activities have been brought under the following General Loan:
# Short term Loan
# Medium term Loan
# Long term Loan
The loans are allowed to individual/firm/industries for a specific purpose but for a definite period and generally repayable by installments fall under this head. This type of lending are mainly allowed to accommodate financing under the categories (i) Large & Medium Scale Industry and (ii) Small & Cottage Industry. Very often term is financing for (i) Agriculture & (ii) Others.
Consumer Credit Scheme
In order to provide financial assistance to the limited income group for raising their standard of living by acquiring domestic durables like freeze, TV, Computer, Motor Car, etc., they have introduced a Consumers Credit Scheme to improve the quality of life particularly of the fixed income earner of the society.
Eligible Items / Articles:
Credit shall be extended under the Scheme for buying the following items / articles:
01. Car, Station Wagon , Microbus, Motor Cycle, Bi-Cycle;
02. Refrigerator, Deep Freeze; Washing Machine; Photocopier;
03. Television, VCR, VCP; Radio, Two-in-one, Three-in-one;
04. Air Cooler, Air Conditioner, Water Cooler, Water Pump;
05. Personal Computer, Type Writer, Camera, Movie Camera;
06. Furniture like Dressing Table, Almirah, khat, sofa set, Wardrobe, etc.
07. Sewing Machine; Telephone Line/Set, Fax Set, Cordless Telephone Set, Cellular phone, Pager etc;
08. Telephone Line/Set, Fax Set, Cordless Telephone Set, Cellular phone, Pager etc;
09. Any other item not specified above but considered essential.
Consumer Credit Products:
1. Car Loan
2. Doctor Loan
3. Advance against Salary
4. Education Loan
5. Travel Loan
6. Marriage Loan
7. Hospitalization Loan
8. Household Durable Loan
9. Home Loan
10. Any Purpose Loan
11. CNG Conversion Loan
Required Documents
01. Employer Certificate for Service Holders
02. Photocopy of Trade License for Businessmen
03. Photocopy of Tin Certificate, if any
04. Bank Account Statement of last six
05. Photocopy of Passport, Telephone (T&T) Bill, if any
Security
01. Two Personal Guarantee
02. Undated Cheques
Home Loan:
This scheme is to meet the fund requirement for home Loan purpose of salaried person in Govt./Semi govt. /Autonomous bodies/ Multinational Co./Banks/Insurance/Financial Inst./Educational Inst. with confirmed 3-years service ahead and businessman having adequate cash flow.
Loan Limit and Period of Loans
1. For construction, maximum 60% of total cost.
2. For buy apartment or whole building, maximum 70% of total cost.
3. For old apartment or old building, maximum 50% of cost
4. Loan limit maximum Tk 50,00,000.00
5. Period of loan would be 20 years.
Required Documents
01. Employer Certificate for Service Holders
02. Photocopy of Trade License for Businessmen
03. Photocopy of Tin Certificate, if any
04. Bank Account Statement of last six
05. Photocopy of Passport, Telephone (T&T) Bill, if any
Security
01. Two Personal Guarantee
02. Undated Cheques
Any Purpose Loan:
This scheme is to meet the emergency need for fund by fixed income group of salaried person in Govt./Semi govt. /Autonomous bodies/ Multinational Co./ Banks/Insurance/Financial Inst./Educational Inst. with confirmed 3-years service ahead. Letter of introduction including name, fathers name, designation, date of birth, date of joining, place of posting, date of last promotion, date of retirement, basic salary, total emolument, take home salary etc. will be required. This scheme is only for service holder.
Required Documents
01. Employer Certificate
02. Photocopy of Tin Certificate, if any
03. Bank Account Statement of last six months
04. Photocopy of Passport, Telephone (T&T) Bill, if any
Security
01. Undated Cheques
02. Lien on Service benefit of the concerned employee from the employer
CNG Conversion Loan:
This scheme is to meet the funds requirement for CNG conversion of vehicles for those who are salaried person in Govt./Semi govt. /Autonomous bodies/ Multinational Co./Banks/Insurance/Financial Inst./Educational Inst. with confirmed 3-years service ahead, businessman having adequate cash flow and corporate Bodies.
Required Documents
01. Employer Certificate for Service Holders
02. Photocopy of Trade License for Businessmen
03. Photocopy of Tin Certificate, if any
04. Bank Account Statement of last six months
05. Photocopy of Passport, Telephone (T&T) Bill, if any
06. Photocopy of the Blue Book etc.
07. Photocopy of the registration of the Vehicle
Security
01. One or two personal guarantee from family member (effective member i.e. spouse / father / mother / brother / earning son, Corporate guarantee in the case of Company or as the case may be acceptable in the bank).
02. Undated cheques in favor of the Bank covering the whole amount
Lease Finance
Lease financing is one of the most convenient long term sources of acquiring capital machinery and equipment. An obvious advantage of the lease is to use an asset without having to buy it. The lessee is obligated to make lease payments until the expiration of the lease agreement, which corresponds to the useful life of the asset Lease Items / Equipments:
Commercial Banks offer lease finance for acquiring the use of capital machinery, equipments, medical instruments, etc. the customers are entitled to decide the specification, price and model of the lease item/equipment. Bank will purchase the item (s) in accordance with the specifications given by the clients.
Salient Features of lease Financing:
01. Lease finance is offered for acquiring the use of Capital Machinery, Equipments, Medical instruments and Automobiles.
02. Financial Lease is long term in nature and is non cancelable.
03. The customer will be required to make a deposit equivalent to 3 (three) Months lease rentals to the bank on the date of singing of the lease agreement, which shall be refunded to the client at the expiry of lease term.
04. Bank will purchase the equipment after confirmation of the acceptance of the equipment by the client.
05. On execution of lease, the client and the Bank shall enter into an amendment lease agreement reflecting the actual acquisition cost.
06. The term of lease is maximum 5 (five) years in case of Capital Machinery, Equipment and medical instrument but 4 (four) years in Automobiles.
Hire purchase
Hire Purchase is a type of installment credit under which the Hire Purchase aggress to take the goods on hire at a stated rental, which is inclusive of the repayment of principal as well as interest for adjustment of the loan within a specified period.
House Building / Apartment Loan Scheme:
Loans allowed to individual/ enterprises for construction of house (residential or commercial) fall under this type of advance. The amount is repayable by monthly installment within a specified period. Such advances are known as loan (HBL-GEN). Loans allowed to our Bank employees for purchase /construction of house shall be headed staff loan (HBL-STAFF).
Advance against Share:
In order to contribute to the development of the Capital Market of the country some banks extend credit facilities against pledge of Shares to the individuals as well as to the member of DSE & CSE.
Terms & Condition
01. For availing of credit facilities against pledge of Shares the intending borrowers shall deposit shares of at least three (3) Companies, which are preferably registered in his/her name.
02. Credit facilities in the form of Secured Overdraft (SOD) limit may be allowed up to 50%of the value of shares pledged calculated on the basis of current market prices or previous 6 month’s average market prices, which is lower.
03. The Share certificate must be accompanied by form -177 containing the signature of the shareholders duly checked and verified.
04. The maximum ceiling shall Tk. 20.00 lac for individual borrowers.
05. Interest rate will be charged @ 15% P.A with quarterly rests or as may be amended from time to time.
Small and Medium Enterprise (SME):
There are many small and medium entrepreneurs in the country that have innovative idea, spirit and potentiality to do something productive for local Consumers as well as export abroad. Commercial Banks provide loan to small and medium entrepreneur and play positive role in the overall socioeconomic development of the country.
Foreign Exchange
Foreign Exchange division is a very important part of any commercial Bank. At present all Authorized Dealer branches different Banks are doing foreign dealings with their clients directly . At present branches play a very important role in supporting L/C (Letter of Credit) facilities to their customers. To open an LC in a Bank the following requirement are necessary for any client:
· They should have a Current Deposit (CD) account in that branch.
· There transaction list should have a good track record of business.
· They should bear a IRC (Import registration certificate) from the authority of Chief controller of Import and Export.
· They should have a TIN certificate.
· They should mention their all prospective business deal in a Pro forma invoice where all the description of the business should be notified.
At present the commercial banks in Bangladesh is paying more importance in foreign exchange dealings. The reason behind it is that it provides them with huge profit than other fields. Commercial Banks are aware of the whole matter and so they are leading in this field at present than other NCB in Bangladesh. Good customer management and service helped the institution to invade the proud field certainly.
2. 6 the Management
Management is an important part of any organization; A good management can ensure better customer services. Chairman, Directories, Managing Directors, Deputy managing Directors, Head of Various Division of Head Office and Branch Manager are the main management body of commercial Banks.
Board Of Directors
Board of Directors of different Banks consists of Directors, Chairman, Vice Chairmans and Managing Director.
Common Hierarchy of Chimerical Banks
| Chairman |
| ¯ |
| Managing Director |
| ¯ |
| Deputy Managing Director |
| ¯ |
| Senior Executive Vice President |
| ¯ |
| Executive Vice President |
| ¯ |
| Vice President |
| ¯ |
| Senior Assistant Vice President |
| ¯ |
| Assistant Vice President |
| ¯ |
| First Assistant Vice President |
| ¯ |
|
Senior Principal Officer /Senior Executive Officer |
| ¯ |
|
Principal Officer / Executive Officer |
| ¯ |
|
Senior Officer |
| ¯ |
| Officer |
| ¯ |
| Assistant Officer |
| ¯ |
| Trainee Officer |
Literature Review
3.1 Customer Relationship Management
Customer relationship indicates the effective customer service. A customer service assures that one thing. Customer satisfaction is the top priority. The reasons are:
a) To know customer attitude towards the bank.
b) Understanding of what the customer really wants.
c) Quickly providing answers to customer’s inquiries and problems.
d) Friendly and responsive behavior.
e) Making personalized services available whenever possible.
Characteristics of good Customer Services are as under:
Intangibility: Service cannot be seen but may be realized.
Inseparability: Service and Service provider cannot be separated.
Variability: Service may vary from time to time.
3.2 Criteria of Customer Relationship Officer
Customer Relationship Officer should be:
a) Knowledgeable about the offered product benefit.
b) Knowledgeable to go through the balance sheets properly and analyzes that in a proper way.
c) Updated about the banks policy.
d) Showing courtesy, consideration, and concern in all of his dealings.
e) Being honest, responsible and reliable.
3.3 Types of Banking Products and Services
a) Retail Banking.
b) Corporate banking.
c) Deposit mobilization.
d) Advance disbursement.
e) Remittance.
f) Other services.
3.4 Guidelines to develop relationship with the customer
The guidelines are as follows:
· Knock door to door of the target customers with proper information about them and try to offer them the best solution fit to every CRO has the responsibility to given the flavor to the customer.
· Try to provide more personalized services.
· Each CRO should maintain 15 to 25 accounts according to the volume of the business
· There should be some CORs at each branch to provide personalized services
· CRO should get training to develop them for providing better services
· CRO should maintain database on each client to pursue him or her properly.
· CRO should monitor the customers at the close distance and update the office about his or her position.
CRO should be innovative to find out the right technique to increase his idea
3.5 Common Terms & Their Operations at Customer Service.
Deposits:
All deposits that are accepted by commercial banks may be classified into:
a) Demand deposits
b) Time deposits
Demand Deposits
These deposits are without notice; commercial banks accepts demand deposits through the opening of
a) Current account (CD)
b) Saving account (SB)
c) Call deposits from the fellow bankers
Time Deposits (TD)
A deposits which is payable at a fixed date or after a period of notice is called time deposit. commercial banks accept time deposits through fixed deposits receipt, Short-term deposit, Bearer certificate deposit etc. a contact is done between the bank and the customer. When the officer opens an account in the name of a customer, there arises a contract between them. This contract will be a valid one only when both the parties are competent to enter into contracts As account opening initiates the fundamental relationship and the banker has deal with different legal status, commercial banks officials remain very much careful about the competency of the customers.
Deposit Rate
The rates of interest on deposit are given below:
SL# Particulars Rate
01 Short Term Deposit 3.5.00% -6.5%
02 Saving Deposit 4.00% – 6.0%
03 Fixed Deposit 6.0% – 9.5%
Procedure of Opening an Account
Before opening a current or saving account, the following formalities must be completed by the customer:
# Application on the prescribed form
# Furnishing photographs
# Introduction by an account holder
# putting specimen signatures in the specimen card
After fulfilling the above formalities, COMMERCIAL BANKS provides the customer a chequebook.
3.6 Different types of Deposit Accounts
Commercial banks offer the following types of accounts and their formalities.
Current Account:
Proprietorship: The client has to fill up corporate account form. Terms and condition are printed on the back of the form. Two copies of passport size photographs duly attested by the introducer are affixed with the form.
The customer has to submit the valid trade license and tax paying identification number (TIN) along with the application. The account holder has to provide valid passport/ ID card/ Voter ID card/ chairman certificate etc.
Partnership: In case of partnership account, the bank asks all the documents require for opening proprietorship account and it also require the following:
a) A copy of the partnership agreement ( partnership deed)
b) A letter signed by all the partners containing the following particulars:
# The name and address of all the partners, and firm’s business.
# The name of the partners authorized to operate the account in the
Name of the firm, including the authority to draw, endorse and
Accepting the bill and mortgage and sell the properties
Belonging to the firm.
Limited Company: On having the desire to open an account from a limited company, an officer of commercial banks asks for the following documents:
a) Registration certificate from the registrar of join stock of companies.
b) Certificate of incorporation, certificate of commencement of business.
c) Memorandum of association and articles of association.
d) Copies of annual accounts, Copy of the board’s resolutions which contains.
Societies, clubs, association: Incase of these sorts of accounts, commercial banks requires the following documents:
a) Registration certificate under the societies registration act, 1962
b) Copies of memorandum, articles of association
NGO: The account opening procedure is same but in exception is that registration certificate from the social welfare department of government must be enclosed with the application.
Savings Account:
To encourage saving habit amongst the public, banks allow depositors to open savings accounts. Interest is awarded on the balance of the account. The number of withdrawals is generally restricted. Requirements to open an account are as follows:
a) Account opening form to be filled up by the applicant.
b) Two passport size photographs attested by the introducer are needed.
c) Passport or nationality certificate is required to open an account.
d) Introductory reference to be obtained from account holder acceptable to the bank.
e) Specimen signature of the application is taken on the signature card.
f) In a saving account minimum Tk. 1,000 is required as balance.
For opening every type of account a signature card and different register for different types of account is mentioned in the bank. An account number is given for each account and the description of the account is entered in the computer holder and to the introducer but in practice it is not done.
Short Term Deposit Account
In short term deposit, the deposit should be kept for at least sever days to get interest. The interest offered for STD is less than that of saving deposits in commercial banks. Various big companies, organizations, government departments keep money in STD accounts. Frequent withdrawal is discouraged and requires prior notice.
Fixed Deposit
It is also known as time liabilities or term deposits. These are deposits, which are made with the bank for a fixed period specified in advance. The bank offers high rate of interest on such deposits. In Prime Bank Limited, fixed deposit account is opened in two forms. One is midterm that is less than one year and the other is term deposit, which is more than one year.
Procedure of Opening Fixed Deposit Account:
The depositors has to fill an application form where in he or she mentions the amount of deposit, the period of which deposit is to be made and the name or names in which the fixed deposit receipt is to be issued. The banker also takes the specimen signatures of the depositors. A FDR is then issued to the depositor acknowledging receipt of the sum of money mentioned therein, it also contains the rate of the date on which the deposit will due for payment.
Bearer Certificate Deposit (BCD):
The bearer certificate deposit is a document of title similar to time deposit receipt issued by the bank. The document is a bearer document, hence readily negotiable, whoever presents it to the bank, has the right to get the money. There is no prescribed interest rate on such funds but COMMERCIAL BANKS offers 1%less than the rate of the term deposit of different maturity. The face value is the sum principal amount and the interest.
3.7 Closing procedure of Accounts
The closing of an account takes place:
# If the customer desires to close the account
# If commercial banks finds the account not in operation for a long duration
# If garnishee order is issued by the court on commercial banks
# To close the account, the chequebook is to be returned to the bank. commercial banks
Takes all the charges by debiting the account and the remaining
Balance is then paid to the customer.
3.8 General Banking Instruments
There are different types of Instruments by which different services are provided to the customers. These Instruments are used to do the task smoothly and in a very efficient way.
Cheque Book
To facilitate withdrawals and payments to third parties by the customer, commercial banks provides a chequebook to the customer chequebook contains 10 leaves for savings account while for current account is 10 to 100 leaves. This register contains the chequebook number, leaf number, issuing date. After giving these entries to this register, information is sent to the computer department for taking the necessary steps to pass the Cheques during withdrawal.
Pay Order
A pay order is a written order, issued by a bank, to pay a certain sum of money to a specified person or a bank. A pay order is issued and paid by the same branch of a bank and such, the drawer and the drawee’s are the same. The person or the organization in whose favor it is issued is known as payee or the beneficiary. The purchaser should sign the standard application form giving detailed particulars and request for issue of PO. The payee or beneficiary must not appear to be fictitious. His full name and address should be written on the application bank should recover commission of pay order from the purchaser. A pay order is divided into three parts viz.
Pay Slip
A Pay Slip is written authorization for making payment-specified person or firm payable by issuing branch, for a discharge liability of the bank. As pay slip is originated made payable by the bank in a receipt form there is no need for any application for its issue. For example, bank is required to make payment of bills for the purchase of furniture & fixture, for printing & stationary and for any other works done on its behalf by the other party on agreement with the bank.
3.9 Inward and Outward Remittances
Banks have a wide network of branches all over the country and offer various types of remittance facilities to the public. The remittance of funds by banks is made through different methods. They are
1. Demand Drafts (DD)
2. Mail transfers/ On line transfer
3. Telegraphic transfer
Demand drafts
Demand draft is an order to pay money, drawn by one branch of a bank for a sum of money payable to order on demand. The purchasers of the draft fill in the relative application form with his name, amount, and name of the payee, the amount and the office in which it is drawn. In order to sure safety, the purchaser is advised to cross the draft and the bank gives a test number.
Mail Transfer/ On line transfer:
Mail Transfer is an advice regarding remittance of funds sends by one branch of the bank to another branch of the same bank, at the written request of the application the mail transfer contains the name and address of the remitter. It is a nonnegotiable instrument and generally is not handed over to the customer rather sent through post office to the concerned branch for credit to the respective account.
Telegraphic Transfer:
Telegraphic Transfer may be affected at the written request of any person and against value received from him. A written application on the bank’s prescribed form duly signed by the purchaser should be obtained. It is however, preferable to obtain a confirmation cheque from the customer.
The application form is in variably checked on the following points:
# There should be a branch of Prime Bank Limited in the place on
Which telegraphic transfer will be issued and the said branch has
Test arrangement with the issuing branch.
# Full name of the payee and his or her account no. in case instructions
Are to credit his or her test arrangement with the issuing branch.
# The amount of T.T. commission and telegram charges should be
Received from the purchaser.
# Now, a cost memo for the T.T. is also to be prepared by the officer
Under his signature, this contains the amount of T.T. commission
& telegram charges and is delivered to the purchase.
Dishonor of Cheque
If the cheque is dishonored, commercial banks send a memorandum (cheque return memo) to the customer stating the reason in the following way:
1) Insufficient fund, Exceeds arrangements
2) Effects not cleared, may be presented again
3) Payment stopped by drawer
4) …………… payee’s endorsement irregular/illegible/required
5) …………… payee’s endorsement irregular, requires bank’s confirmation
6) Drawer’s signature differs/required
7) Cheque is post dated/out of date/mutilated
8) Amount of words and figure differs
9) Crossed cheque must be presented through a bank, clearing stamp required/requires cancellation
10) Cheque crossed “Account payee only”
If the cheque is dishonored due to insufficiency of funds, COMMERCIAL BANKS charges Tk. 50 –Tk.500.00 as penalty. If the cheque is lost then the customer must inform the police and should take a copy of G.D. the customer then fills an indemnity for guarantying that the cheque is lost. When the bank is convinced with having the above documents bank gives to the customers a new chequebook.
3.10 Online Banking Operation
The bank has set up a wide area network across the country to provide online branch banking facility to its valued clients. Under the scheme, clients of any branch shall be able to do banking transaction at other branches of the bank. Under this system a client will to do the following type of transaction:
# Cash withdrawal from his or her account at any branch of the bank
Irrespective location.
# Cash deposit in his or her account at any branch of the bank
Irrespective location.
# Transfer of money from his or her account at any branch of the bank.
# Cheque deposit at any branch.
Online Facilities: All the branches of DBBL are operated by centrally online system. So, any customer can be able to do any transaction at any branch. No matter, where he was the account and the clients do not have to pay any charges for online transaction.
Data Centre: DBBL has the largest data centre in Bangladesh. So, customers are getting very quick services and various operations are made through online in a very short time.
ATM & Debit Card: The Bank delivers the ATM & debit card to all the account holders within seven days of opening an account. Also, by using ATM card any client can make over drew but there are some conditions. Clients are also be able to pay utility bills through ATM.
Point of Sell (POS): DBBL has delivered 5000 POS machines to different shops and markets at different important locations at Dhaka and other city. So, people will be able to do their shopping from anywhere (POS holder) at different big city without bearing any risk.
3.11 Clearing of Cheque Through Clearing House
In this unit, all the cheque of commercial banks of Bangladesh are deal. There are two kinds of clearing process.
- Inward clearing
- Outward clearing
Types of clearing house:
There are two type of clearing house: Those are
1) Normal clearing house
2) Same day clearing house
Process of inward clearing:
After receiving cheque from the local office of commercial banks , those cheques are directly send to the computer section for checking the balance of those specific accounts from which money should be collected. If the required balance available there then amount is debited from that account and the cheque is honored. But incase if the require balance is not available the authorize officer of clearing department immediately informs the head of the customer service or he tries to connect the account holder. Finally the authorized officer gives all the entry of those cheques in inward clearing register. The format of the register book is given below:
| SL# | Bank Name | Branch Name | Cheque No | Amount | Drawn on | Remarks |
After giving the entries, a credit advice is sending to the local office of Prime Bank Limited.
Process of outward clearing
For outward clearing cheques, the bearer of the cheques must have an account in Foreign Exchange branch of commercial banks . After the submission of the cheques, authorized officer gives the entries in software, which is provided by Bangladesh bank. The name of the software is Nikash. After giving all the entries are printed and are enclosed with the cheques. Then all the cheques with the enclosed sheets are sent to the local office of commercial banks for the collection of money. The local office sends it to clearing house.
Types of clearing house:
There are two type of clearing house: Those are
1) Normal clearing house
Normal clearinghouse:
1) 1st house: 1st house normally stands at 10 a.m. to 11a.m
2) 2nd house: 2nd house normally stands after 3 p.m. and it is known as return house.
Same day clearing house:
1) 1st house: 1st house normally stands at 11 a.m. to 12 p.m
2) 2nd house: 2nd house normally stands after 2 p.m. and it is known as return house.
- Who will deposit cheque for Clearing: Only the regular customers i.e. who have Savings, Current, STD & Loan Account in the bank can deposit cheque for collection of fund through Clearing house.
3.12 Accounts Section
Accounts Department is called as the nerve Centre of the bank. In banking business, transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors’ money. . Improper recording of transactions will lead to the mismatch in the debit side and in the credit side. To avoid these mishaps, the bank provides a separate department; whose function is to check the mistakes in passing vouchers or wrong entries or fraud or forgery. This department is called as Accounts Department. If any discrepancy arises regarding any transaction this department report to the concerned department.
Besides these, the branch has to prepare some internal statements as well as some statutory statements, which are to be submitted to the Central Bank and the Head Office. This department prepares all these statements.
Analysis & Findings
4.1 Sample Survey
I have selected four banks from different generation like premier Bank, Dutch-Bangla Bank, BRAC bank and National Bank to compare the quality and satisfaction level of customer services with Prime Bank Limited. One investigator has prepared a questionnaire for the clients of the above selected banks to compare some common and basic services within customer service. The target sample will be 100 and 20 will be from each bank.
4.2. Graphical Representation of Survey Results
Now the survey result is highlighted by graphical representation in percentage basis as follows:
Table-01: Occupation of the Respondent Customers
| No | Type of Occupation | Number of Respondents | ||||
| Prime Bank | Premier Bank | Dutch-Bangla | NationalBank | BRAC Bank | ||
| 1 | Clerical Services | 1 | 2 | 0 | 2 | 1 |
| 2 | Managerial Services | 3 | 5 | 2 | 4 | 3 |
| 3 | Technical Services | 2 | 1 | 3 | 1 | 2 |
| 4 | Professional Services | 6 | 3 | 7 | 3 | 5 |
| 5 | Trade | 3 | 5 | 2 | 3 | 4 |
| 6 | Industrialist | 2 | 1 | 3 | 5 | 2 |
| 7 | Housewife | 2 | 1 | 2 | 1 | 1 |
| 8 | Student | 1 | 2 | 1 | 1 | 2 |
The graph represents here that about 30% customers of PBL are from professional services, 15% from managerial services and trade. And the rest is from clerical services, technical services, industrialist, housewife and student. In premier Bank about 50% customers are from managerial services and trade. In DBBL largest group is from professional services and in National Bank the largest group of customers is industrialist and in BRAC Bank more percent of customer are from professional service & Trade.
Table-02: Reason for choosing Bank
| No | Types | Number of Respondents | ||||
| Prime Bank | Premier Bank | Dutch-Bangla | National Bank | BRAC Bank | ||
| 1 | Size of the Bank | 3 | 2 | 2 | 5 | 2 |
| 2 | Reputation of the Bank | 6 | 3 | 5 | 5 | 2 |
| 3 | Location of the Bank | 5 | 7 | 4 | 4 | 8 |
| 4 | Network of the branch | 3 | 3 | 3 | 5 | 0 |
| 5 | Personal Relationship | 3 | 5 | 6 | 1 | 8 |
In this graph, it is seen that in DBBL 55% clients have come for reputation of the Bank and location of the branch. And the rest has come for size of the Bank, network of the branch and personal relationship. In other Banks the clients opened their account for almost the same reasons but in BRAC Bank 80% clients joined there by personal relationship and for location of the branch.
Table-03: Satisfaction with the Branch Location
| No | Types | Number of Respondents | ||||
| Prime Bank | Premier Bank | Dutch-Bangla | National Bank | BRAC Bank | ||
| 1 | Yes | 18 | 14 | 20 | 18 | 20 |
| 2 | No | 2 | 6 | 3 | 1 | 0 |
From the survey, we can see that in PBL 90% customers are satisfied with the branch location, in premier Bank 70% customers are satisfied, in DBBL 75% customers are satisfied, in National Bank 95% customers are satisfied and 100% customers of BRAC Bank are satisfied with their branch location. A very few is dissatisfied with the branch location.
Table-o4: Formalities that the Bank asks for opening an account
| No | Types | Number of Respondents | ||||
| Prime Bank | Premier Bank | Dutch-Bangla | National Bank | BRAC Bank | ||
| 1 | Excellent | 10 | 13 | 17 | 14 | 15 |
| 2 | Very good | 3 | 3 | 3 | 2 | 3 |
| 3 | Good | 2 | 3 | 0 | 3 | 0 |
| 4 | Satisfactory | 4 | 1 | 0 | 1 | 0 |
| 5 | Dissatisfactory | |||||