A Study on Consumer Loan Of BRAC Bank Ltd.
Organization Profile- an overview of BRAC Bank limited
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 five years of operation, the Bank has disbursed over BDT 1500 crore in loans to nearly 50,000 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 26 branches, 350 RETAIL unit offices and 19 ATM sites across the country, and the customer base has expanded to 200,000 deposit and 45,000 advance accounts. In the years ahead BRAC Bank expects to introduce many more services and products as well as add a wider network of RETAIL unit offices, Retail Branches and ATMs and paid up capital of the same bank is Tk 500.million.
Fig-Shareholders of BRAC Bank Limited
Background of the Organization:
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. Fazle Hasan Abed. Now the Managing Director of the bank is Mr. Imran Rahman. The bank has made a reasonable progress due to its visionary management people and its appropriate policy and implementation.
Corporate Vision:
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 responsive 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 serve its customers with respect and will work very hard to instill a strong customer service culture throughout the bank. It will treat its employees with dignity and will build a company of highly qualified professionals who have integrity and believe in the Bank’s vision and who are committed to its success. BRAC Bank will be a socially responsible institution that will not lend to businesses that have a detrimental impact on the environment and people. So BRAC Bank operates following a specific vision like:
“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”.
Corporate Mission:
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 Charges at 2% to maintain a steady profitable growth
Achieve efficient synergies between the bank’s Branches, RETAIL 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
Corporate Values:
The Bank’s Strength emanates from its owner – BRAC. This means, it will hold the following values and will be guided by them as it does its jobs.
Value the fact that we are a member of the BRAC family
Creating an honest, open and enabling environment
Have a strong customer focus and build relationships based on integrity, superior service and mutual benefit
Strive for profit & sound growth
Work as a team to serve the best interest of our owners
Relentless in pursuit of business innovation and improvement
Value and respect people and make decisions based on merit
Base recognition and reward on performance
Responsible, trustworthy and law-abiding in all that we do.
Goals:
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.
Objectives of the Bank:
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.
To develop the standard of living of the limited income group by providing Consumer Credit.
To finance the industry, trade and commerce in both the conventional way and by offering customer friendly credit service.
To encourage the new entrepreneurs for investment and thus to develop the country’s industry sector and contribute to the economic development.
Bank’s Culture:
Bank has adopted trust as a corporate value which is acronym for team work, respect for all people, unquestionable integrity, excellence in everything BRAC Bank of RETAIL do, Sense of urgency in getting things done and total commitment.
All employees are expected to conduct themselves in accordance with the rules and regulations of the bank.
Bribes & Inducements:
It is not acceptable to offer or receive any form of bribe or inducement, or direct anyone else to do on behalf of the bank. The following activities are strictly prohibited:
Payment or other benefits which violate the country’s law or the bank’s policies
Payment or other benefits for procurement of business
Payment or other benefits to public officials or politicians to induce them to exercise their discretion in the bank’s favor
Management of BRAC Bank Limited:
Boards of directors are the sole authority to take decision about the affairs of the business. Now there are 5 directors in the management of the bank. All the directors have good academic background and have huge experience in business. Mr. Fazle Hasan Abed is the chairperson of the bank. 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:
Management Team:
| Imran Rahman
Managing Director & CEO |
|
| Kaiser Tamiz Amin
Chief Operations Officer |
|
| Rais Uddin Ahmad
Head of Risk Management & Company Secretary |
Saifuddin M. Naser
Head of Retail Banking |
| Mohd. Rafat Ullah Khan
Head of Credit |
Naushad Hussain
Head of Secured Remittance Service |
| Tahniyat Ahmed Karim
Head of Human Resources |
Faruk Ahammad
Head of Financial Administration |
| Farzana Chowdhury
Head of Small & Medium Enterprise (RETAIL ) |
Md. Rahmat Pasha
Head of Treasury |
| Khwaja Shahriar
Head of Corporate Banking |
Shah Alam Bhuiyan
Head of Asset Operations |
| Mizanur Rahman Chowdhury
Head of Information Technology (IT) |
|
Board of Directors:
| Mr. Fazle Hasan Abed, Chairman | |
| Mr. Syed Humayun Kabir, Director | Mr. Md. Aminul Alam, Director |
| Mr. Paul D. Christensen
(Nominated By Shorecap International Limited), Director |
Mr. Muhammad A. (RUMEE) ALI (Nominated by BRAC), Director |
| Mr. Quazi Md. Shariful Ala
(Nominated by BRAC), Director |
Mr. Imran Rahman,
Managing Director and CEO |
Achievements:
Þ Fastest growing bank in the country for the last two years
Þ Leader in SME financing through 350 offices
Þ Biggest suit of personal banking & SME products
Þ Large ATM (Automated Teller Machine) & POS (Point of sales) network
Departments of BRAC Bank Limited:
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:
1. Human Resources Department
2. Financial Administration Department
3. Asset Operations Department
4. Credit Division
5. RETAIL Division
6. Internal Control & Compliance Department
7. Marketing & Product Development
8. Impaired Asset Management
9. Remittance Operation Department
10. Treasury Front
11. Treasury Back
12. General Infrastructure Service
13. Information Technology Department
14. Customer Service Delivery
15. Cards Division
16. Call Center
17. Cash Management
18. Secured Remittance department
19. Women Entrepreneur Cell
20. Payment Service
Business Units:
There are five different business units generating business BRAC Bank Limited:
Small & Medium Enterprise (RETAIL )
Corporate Banking
Retail Banking
Treasury
Remittance Services
All the units are being operated in a centralized manner to minimize costs and risks.
RETAIL Products-
1 Prothoma Rin.
2 Supplier Finance.
3 Anonno Rin.
4 Digoon Rin.
5 AroggoRin.
6 Pathshala Rin.
7 Opurbo Rin.
Corporate Banking:
Categories- the facilities our corporate Division offers to our customers are mainly of two-
Funded Facilities Non-Funded Facilities
Funded tells us that this type of facilities allows the customer to have money ‘on his hand’ for use i.e. he will get money as to meet his business demand. Examples are-
Working Capital Loan.
Over Draft Facility.
Term Loan.
Lease Finance.
Demand Loan.
Non-Funded Facilities-
Non-Funded facilities are those type of facilities where customers don’t get fund on their hand rather get Bank’s Guarantee service to do international trading-import and export. Letters of Credit, Bank guarantees etc. are the examples of the non-funded facilities.
Working Process of corporate wing-
An example will be handy to understand when the corporate wing starts its work. Say you are one of our clients. You need Tk. 5 core to be used in your business. The first you may contact is the RM (Relationship Manager) who is our delegate to make all kinds of negotiation with you. He then Would take the proposal to the corporate Head takes it for further analysis such as whether it would be profitable venture for the Bank, or whether the Bank can disburse more in the industry etc. Then if the Corporate Head thinks it fit to go ahead, he then would take the file to the credit division – works to find out the worthiness of the borrower and other relevant facts important to assess the possibility of recovery. Then it goes to the credit committee and then finally the file goes to the Managing Director. A diagram is given for better understanding-
Retail Banking:
Retail Loans are consumers’ loan. Based on the customer demand these loans are given. BRAC Bank has a wide range of retail loan-
1. Car Loan. 2. Doctor’s Loan.
3. Secured Loan/OD. 4. High Flyer Loan.
5. Top Up Loan. 6. Credit Card Loan.
7. Study Loan. 8. Teacher’s Loan.
9. Now Loan. 10. Salary Loan.
Process Flow of Retail Loan
BRAC Bank’s Retail Division is being operated centrally. Under the Retail Banking Division all the branches, which acts as sales & service center, are reportable to Head of Retail Banking. Different products of Retail Banking are as follows:
i) Deposit Products
ii) Lending Products
iii) Locker Services
iv) Remittance Services etc.
The product and services that are currently available are given below-
I) Depository Products
BRAC Bank Limited is now offering 6 depository products for mobilizing the savings of the general people:
· Savings A/C
· Current A/C
· STD A/C
· Fixed Deposit A/C
II) Loan Products
BRAC Bank is offering the following loan and advance product to the client for financing different purpose that fulfill the requirements of the bank and have good return to the investment as well as satisfy the client. The loan and advance products are:
III) New Product and services
The bank has its concentration for new product and services development for satisfying its customer and increasing its customer base. The bank firmly believes that technology based product and services will play significant role in the performance of the bank as people are getting more conscious about their service quality. They prefer now faster service with least cost. For delivering faster service the bank has introduced online banking service from the very beginning. There are some new products and services that
BBL has lately introduced. These are:
Now Loan
Salary Loan
Credit card Services (Proposed)
Islamic Banking Services (Proposed)
ATM services
BRAC Bank Limited is always emphasizing the improvement of banking service and betterment of living standard of the general people of Bangladesh. The product and services are targeted to the lower level to the upper level income group in deposit collection. For lending, the services are made if certain requirements are fulfilled.
IV) Treasury
Money Market Desk
BRAC Bank has a strong presence in the Treasury Market in Bangladesh. The Money Market Desk of the Treasury Division mainly deals in Bangladeshi Taka transactions. The basic activities undertaken by the Money Market Desk are:
Ø Management of Statutory Reserves viz. Cash Reserve Ratio (CRR) & Statutory Liquidity Ratio (SLR)
Ø Daily Funds & Liquidity Management
Ø Investment Management
Treasury Services
Ø Call/Overnight Lending & Borrowing
Ø Term Money Borrowing & Lending
Ø Repurchase Agreement
Ø Treasury Bills (T-Bills)
v) Secured Remittance Services (SRS)
BRAC bank has introduced an innovative remittance services for Bangladeshis living abroad with some unique features compared to any of the existing remittance program. Bangladeshi expatriates can now send their money to their relatives any where in Bangladesh even to the remotest part within 24 hours at a reasonable cost and competitive exchange rate.
vi) Information Technology (IT)
BRAC Bank Ltd. is currently running countrywide true online banking system. The system allows their customers to do transactions all around the country. The bank cheques are all marked with Barcodes that makes each cheque unique and disallows it to be duplicated. All the signature and customer information with their pictures can be verified from any console at any branch on the bank. We also ensure Offsite backup and Disaster Recovery. Their Goal is to provide a true online baking system, which will not only fulfill the demand of time but also set new benchmarks in twenty-first centuries banking world.
Special Features
All Branches are computerized
99% of the bank’s work is automated using latest technology
BRAC Bank is a member of SWIFT community
Intercity Branches are connected via optical fiber backbone network
Branches:
BRAC Bank Limited is fast growing commercial banks in our country. Bank has established a good operating network throughout the country. It has 37 branches throughout the country till October 22, 2008.
| 1 | Barisal Branch | 0501 |
| 2 | Bogra Branch | 0701 |
| 3 | Agrabad Branch | 1101 |
| 4 | Momin Road Branch | 1102 |
| 5 | Halishahar Branch | 1103 |
| 6 | GEC Branch | 1104 |
| 7 | Cox’s Bazar Branch | 1401 |
| 8 | Comilla Branch | 1301 |
| 9 | Gulshan Branch | 1501 |
| 10 | Nawabpur Branch | 1502 |
| 11 | Moghbazar Branch | 1503 |
| 12 | Keranigonj Branch | 1504 |
| 13 | Motijheel Branch | 1505 |
| 14 | Dhanmondi Branch | 1506 |
| 15 | Banani Branch | 1507 |
| 16 | Ganokbari Branch | 1508 |
| 17 | Satmosjid Branch | 1509 |
| 18 | Uttara Branch | 1510 |
| 19 | Mirpur Branch | 1511 |
| 20 | Rampura Branch | 1512 |
| 21 | GB Branch | 1513 |
| 22 | Shyamoli Branch | 1514 |
| 23 | Tongi Branch | 1515 |
| 24 | Dohar Branch | 1516 |
| 25 | Savar Branch | 1517 |
| 26 | Dania Branch | 1518 |
| 27 | Sonagazi Branch | 1801 |
| 28 | Jessore Branch | 2401 |
| 29 | Mymensingh Branch | 4101 |
| 30 | Narayangonj Branch | 4301 |
| 30 | Monohordi Branch | 4401 |
| 31 | Rajshahi Branch | 5501 |
| 32 | Sylhet Branch | 6301 |
| 33 | Beanibazar Branch | 6302 |
| 34 | Zindabazar Branch | 6303 |
| 35 | Biswnath Branch | 6304 |
| 36 | Moulvibazar Branch | 6305 |
| 37 | Nobigonj Branch | 6306 |
| SALES CENTRE | ||
| 1 | Badda Sales Centre | |
| 2 | Kalabagan Sales Centre | |
| 3 | Motijheel Sales Centre |
Performance of BRAC Bank Limited:
BRAC Bank Limited will be the most successful private sector commercial bank in our country, though it started its operation few years back. It has achieved the trust of the general people and made reasonable contribution to the economy of the country by helping the people investing allowing credit facility.
Capital Fund:
The authorized and paid up capital of BBL is TK.1000 million and TK.500 million respectively. The paid up capital is one of the strongest in the banking industry. The bank is going to raise its paid up capital in the month September, 2006 by TK.500 million with issuing public share of 5, 00,000 of TK.100 each.
Internal and External source of cash
| Date | 31/12/05 | 31/12/06 | 31/12/07 | 31/03/08 |
| Ordinary share | 405,020,000 | 500,000,000 | 500,000,000 | 500,000,000 |
| Preference share | 150,000,000 | |||
| Statutory reserve | 19,860,550 | 58,396,570 | 135,564,816 | |
| Surplus in profit | (9,095,940) | 70,346,259 | 224,490,340 | 226,006,069 |
| Total | 395,924,060 | 590,206,809 | 782,886,910 | 1,011,507,885 |
(Amount in Taka)(Annual report 07-08)
| Shareholders | Percent |
| BRAC | 31.74% |
| IFC | 9.50% |
| Shore Cap International | 8.76% |
| General Public through IPO | 40% |
| Non-Residents Bangladeshi’s | 5% |
Fig Shareholders of BRAC Bank Limited
BRAC Bank provides diversified products and service to the customers. It always tries to provide distinctive and customized products, which are best matched with the customer needs and demands.
Width & Length
The width refers to different product lines and length refers to total number of items.
From above figure we can see that BRAC Bank has four width product division and rest of eighteen products are length which’s under different lines.
Depth
The depth of BRAC Bank product refers to number variants under each item
Retail division incorporated with three parts
1) Loan products
2) Deposit products
3) Cards
In the loan products section has Salary, Now, Teachers, Car, Study loan etc. deposit section provide fixed deposit, Interest first fixed deposit, Ezee account, DPS, Savings account, Short term deposit and also cards section has debit card, credit card.
Primary objectives of retail division are to increase its sales volume of consumer products and generate profit by using all up selling techniques. Two types of consumer products and service offer by BBL one us consumer deposit products and another one is consumer loan products. Some creative and experienced people working with retail division leading by Siddique Ahmed VP of retail and asset operation.
Departmental Division
This department is segregated into TWO major divisions. They are:
Transactional accounts (TA)
Primary objective of transactional account section is to create new clients and make relationship with BBL and maintain with existing relationship with clients. All individual relationship maintain by TA section. Seven types of relationship offer by BRAC Bank limited. These are given below:
- Ezee account: banking tats sets you free BRAC Bank offers you Ezee Account a non cheque interest bearing account for small savers who are in frequent need of transaction. You don’t need write a cheque or stand in a long quee to draw your own money from BRAC Bank. You can get an ATM operate your account round the clock.
- Savings account: a regular savings account offering you interest on your deposit amount.
- Current account: BRAC Bank current account is a normal checking account, giving you the option to deposit and withdraw money for your day-to day needs.
- DPS: BRAC Bank Deposit Premium Scheme is a savings plan that adds value to your hard earned money.
- Campus A/C: BBL offering campus account for students.
- Bizness A/C: as like current account but giving interest rate on daily amount
- Femina A/C: offering a attractive relationship with BBL only for women with highest interest rate 7.5%
Salary accounts
BRAC Bank Salary Account is a payroll account for employers and employees. As an organization, you can opt for our Salary Account to enable easy disbursements of salary & enjoy numerous other benefits.
FDR
BBL offering different kind of fixed deposit facilities to its clients these is given below:
- Interest first fixed deposit
This time you don’t have to wait till maturity to receive interest on your fixed deposit. BRAC Bank interest first fixed deposit lets you draw the interest instantly at the time of your deposit. Believe it. A deposit scheme where the client receives interest in advance.
- Abiram account
Your hard earned money is paying-off immediately; BRAC Bank “Abiram” account is a special type of fixed deposit scheme, which offers the flexibility & comfort of having a guaranteed monthly return on your investment. With BRAC Bank ‘Abiram’ account, you can ensure a safe & steady return on your investment.
- Short term deposit
A deposit scheme to give returns on your saving
- Step up fixed deposit
BRAC Bank 3-year Step Up fixed deposit guarantees increase of interest rate each year. It is the most attractive investment because the rate automatically increases each year. Step in today to step up your interest.
Secured Asset
Two type of secured loan provide by BBL. These two are Car loan and secured overdraft (SOD)
1. Car loan: “Start driving not dreaming” BBL providing car loan to three different types clients salaried person, business person and land owner. Why toy with your dreams when you can own one; BRAC Bank car loan can stop your dreaming and start driving whether you want to purchase a brand new car or a reconditioned one; we have the most customer-friendly car loan scheme available for you.
2. SOD: A special scheme that allows you to avail cash at nominal interest rates. Your security is kept untouched in the Bank’s custody as the value grows.
Unsecured Asset
· High flyer loan: Enjoy life the fullest and take benefit of the varied opportunities it offers you. BRAC Bank Highflyer loan is for airline, GSA & Travel Agency professionals is to makes your long cherished desire an absolute reality.
· Doctor’s loan: BRAC Bank introducing Doctor’s loan, an exclusive loan facility for the Doctor’s fraternity. Now practicing Doctor’s can avail this loan very easily to meet their professional needs. So prescribe yourself a dream today. Anti – Headache solution for Doctors
From the above we can see that BRAC Bank has 27 variants (Length of loan products: 12, Length of deposit products: 12, Length of cards: 03)
Sales department always try to increase sales volume and generate more profit for the bank. Whatever doing a Bank ultimately if there are no sales no bank couldn’t survive in the market. Sales department is playing an important part for the Bank. Sales divisions are responsible for sales the entire product which offering by BBL there are three types of consumer product offering by BBL. These are two falls under two section liabilities and asset.
PROCEDURES OF BRAC BANK CONSUMER LOAN
Loan Sanction Activities
· Apply for the loan: clients apply to the bank for consumer loan than DSE/SSE start processing loan file.
· Open clients accounts in the respective bank: When the DSE/SSE decided the client is eligible to get the loan then respective DSE/SSE helps client to open a bank account where BRAC Bank operates. BRAC bank will disburse the loan through this account. On the other hand the client will repay by this account.
· Filled up CIB form: DSE/SSE give a CIB (Credit information Burue) form to the client and the client fill and sign in it. In some case if the client is illiterate then the DSE/SSE fill the form on behalf of the client.
· Sending CIB to Bangladesh Bank: Head offices collect all information and send the CIB form to Bangladesh Bank for clearance. Bangladesh Bank return this CIB form within 10-12 days with reference no.
· CIB report from Bangladesh Bank: In the CIB report Bangladesh Bank can use any of the following reference no:
Ø NIL: If the client has no loan facility in any bank or any financial institution then BB (Bangladesh Bank) use ‘NIL’ in the report.
Ø UC (Unclassified): if the client has any loan facility in any bank or financial institution and if the installment due 0 to 5.99 then BB use UC in the report.
Ø SS (Substandard): if the client has any loan facility in any bank or financial institution and if the installment due 6 to 11.99 then BB use UC in the report.
Ø DF (Doubtful): if the client has any loan facility in any bank or financial institution and if the installment due 12 to 17.99 then BB use UC in the report.
Ø BL (Bad lose): if the client has any loan facility in any bank or financial institution and if the installment due 18 or above then BB use UC in the report.
This report indicates that the client is defaulter and the bank should not provide loan the client.
· Loan decision considering CIB REPORT: Considering CIB report, BRAC bank decide whether it will provide loan the client or not. If the books decide to provide loan then the head office keep all information and DSE inform the clients to submit all necessary charge documents.
Disbursement of Consumer loan
Pre Disbursement Manual Activities
§ Prepare loan file: Receiving all documents, Loan Administration Division prepare loan file with all documents received from DSE.
§ Charge documents checking: The loan administration division checks all charge documents following charge documents are checked:
§ Photo
§ Visiting card
§ ID cards photocopy
§ Letter of introduction
§ Bank statement
§ Loan statement if any
§ Salary slips:
§ Cheques:
§ Cheques photocopy:
§ Personal profile Or A/C op0en from photocopy
§ Guarantor’s photo & personal net worth:
§ Telephone No:
§ TIN copy:
§ Permanent address proof:
§ Experience certificate:
Activision of the loan: Loan administration division do the following tasks to activate the loan
Ø Loan Sanction details set-up
Ø Repayment schedule set-up and printing
Ø Loan activation
Ø Disbursement and CC wise voucher print
Ø Disbursement voucher posting
Post Disbursement Manual Activities
Repayment schedule sent to unit office: Completing the disbursement of the sanctioned amount the loan administration division prepare a repayment schedule in MBS and send it to the client mailing addresses.
Loan details MBS entry: The loan administration division enters details information regarding the loan in MBS. Each offer has an ID no in MBS and if there is any error found then the respective officer will be responsible for it. So every body remains alert at the time of MBS entry.
Send the loan file to archive: completing all activities, loan administration division sends the loan file to the archive foe future information. In future if any document of the loan account require then the bank can collect the file from archive and ret the necessary documents. If the client take repeat loan then it is not require to apply all documents because his all documents stored to the bank.
Consumer Loan Recovery Procedure
Equal Monthly Installments (EMI): Borrower repayment the installment in his loan account bank decide client’s monthly installment.
Entry the installment information to MBS: Loan administration division entry the repayment installment information to the banking software MBS.
Cross Check and solve problems (If any): the loan administration is responsible for all entry in MBS. If the there is any error found in future then the respective offer who entering these onformation in MBS will be able liable for it.
Closing procedures of Personal loan in BRAC Bank
1) Pre-closing manual activities
Receive SMS/letter requesting for closing: The borrower repay the loan as per repayment schedule. When the repayment is being complete the borrower request the BRAC Bank to close his loan account.
Bring the loan file from archive: The loan account file of the respective borrower brought from the archive.
Obtained approval from the concern authority: it is requiring the permission of concerned authority to close the loan and after that next initiatives are taken.
Checking in MBS: The loan administration division checks the loan status in MBS. If there is any difference found with the clients repayment sleeps and MBS then deposits sleeps are re-checked.
Send closing letter to the clients: Bank sends the final loan closing letter to the clients mailing addresses.
MBS entries for loan closing
Pre closing data entry: Completing the manual activities, the loan administration division entries some information to MBS for future requirement and complete following tasks:
Ø Interest/provision charging & print voucher
Ø Charges collection & print voucher
Ø Final repayment entry & print Voucher
Ø Final repayment entry checking
Ø Repayment Voucher posting
Activate account closing in MBS: Completing above mentioned tasks. The loan administration division finally closes the requested loan account in MBS.
Main progress
From 12 April 2007 to 21st august 2008 twelve (12,000) deposit holders of BRAC Bank who are not paying their installment on due time and their penal was not calculated from august 2007 to august 2008 for crashing their banking software. So as w were assigned for this project where we calculated the penal for 12,000 deposit holders. It is an excel program where I can calculate the penal by using some formula, using some condition if, or, then, >, < etc. Firstly download the account statement then entry it to excel format and lastly calculate it and print that copy for submit it. We also attached some account statement with penal calculation in the Appendix section. Now we are providing some formulas by which we can calculate it:
Þ =+G8
Þ =SUM(B8:C8)
Þ =D8-E8
Þ =If (A8>0,F8-A8,F8-F7)
Þ =G8/$f$5
Þ =If (D8>0, D8*H8*j8/360,0)
Previous OD: Previous over due means how much installment have savings in customer account for next payment then it use =+G8
Total: For total amount calculation I use this =SUM (B8:C8)
OD amount: It means over due amount if any customer payment before the due date then it use and we use this =D8-E8
OD Days: Over due date calculate by this =If (A8>0, F8-A8, F8-F7)
ATE: This is ‘alert time awareness’ which is use to aware the customer to pay the installment before the due date,for this I use=G8/$f$5
Total PI: For calculating total penal interest then we use this formula =If (D8>0, D8*H8*j8/360, 0)
Now we show a penal calculation manually, which is given blow
Installment size =1475
Interest rate = 4%
Over due days =1 (Installment date start from 25th April but it collection on 26 April)
Total penal interest = (1475*1*.04)/360
= 0.16tk
After first payment of installment then the payment was 296.74
Interest rate = 4%
Over due days =4 (installment date was 25th April but now it collection on 30th April)
Total penal interest = (296.74*30*.04)/360
= 0.13tk
So by this way, the total penal interest of this customer is 15.30tk after 25 july 2008.
In our project sometimes we find that few customers or deposit holders have no penal charge on their account then we second times recheck it. But really they have no penal for lately pay the installment because they pay their installment on the due time. But their portion very few some.
Consumer Loan & Customer Satisfaction of BBL
So far in this report the comparative analysis has been done from the Bank’s point of view. To get a whole picture of BRAC Bank’s customer satisfaction, it is necessary to discuss with the customers. How much the customers are satisfied with the personal loan providing BRAC Bank Ltd. Compare to other banks. Are the customers happy with the personal loan from the banks? These sort of similar questions are needed to be answered. In this connection, a questionnaire has been developed and consumer loan from BBL under study have been interviewed.
Procedure of measuring satisfaction level
The study has been conducted to get a picture about satisfaction level of customers with the personal loan they are enjoying with the bank. To do this, the questionnaire has been framed such a way that helped the interviewer to get an idea about their satisfaction level. Each question in the questionnaire has three options to choose- 1.High 2.Medium & 3. Low
The customers had to choose any one of them in each question to express their satisfaction level. If the customer is very much satisfied about the parameter asked, he pr she can choose the option high and if thee customer is totally dissatisfied with the parameter, he or she can choose the last option. If the customer is neither satisfied nor dissatisfied, he or she has the option of choosing medium to express their satisfaction level.
Strength
Strong Network
BRAC Bank strengthening their position through the SME department since the growth of banking in rural and semi-urban areas is very desirable. Currently BRAC Bank has 356units offices throughout the country.
Efficiency:
An efficient system of bank’s clearing and remittance is pre-condition for sound banking in developing country. BRAC Bank has invigorated the position through the signing contract with Western Union Money Exchange.
Exclusive service
Online Banking, Non stop Banking, Locker Service ATM etc has made the bank exclusively distinctive towards the respective clients.
Distinctive products
BRAC Bank Ltd. Always try to provide distinctive and innovative products to the customer for instance Students Loan, Anonno Rin, Digoon Rin, Femina A/C.
SME sector
BRAC Bank Ltd. Is the market leader in SME sector
Share Holding Partner
IFC and shore Cap international Ltd. Are shareholding partners of BRAC Bank Ltd.
Strong Management Team
BRAC Bank is operating their business with a strong management team by whom it is competing equivalently with some multinational banks.
In-depth Training:
BRAC Bank provides in-depth and exclusive training to it’s employees to make them more efficient and keep them updated.
Weakness
Number Of Branches
BRAC Bank Ltd. Is serving the customers with only 37 branches across the country, which is not sufficient.
Customers Comfort
In some cases the space of the branches is too small comparing to the number of clients. For this reason the employees of BRAC Bank can attain the customers comfort properly.
Branch Facility
All the branches are not under the coverage of ATM & Non-Stop Banking facility
Decision Making Process
BRAC Bank follows centralized decision making process, which is not good at all circumstances.
Media Coverage
Mass media communication is very essential to promote any product. But BRAC Bank is concentrating less on media coverage.
Opportunity:
Market expansion
As BRAC is a well-known NGO across the world in case of poverty elimination, so BRAC Bank Ltd. can access very easily outside the country as well.
Grab the market
Since the world is moving toward e-commerce and the people are becoming more conscious to save time and money, BRAC Bank online & Non-stop banking facility can grab the market very smoothly compare to other commercial banks.
Tie Up
Although BRAC Bank Ltd. already has strategic tie up with different companies, they have the opportunity to make it more.
Corporate agreement
Although BRAC Bank already has corporate agreement with different companies like VFS Bangladesh, western Union Money Transfer, they have the opportunity to arrange other corporate agreement with other companies.
Threat
Competitors
Numbers of potential competitors are increasing day by day
Economies of scale
As a new commercial bank it is deprived of enjoying the economies of scale
Natural Calamities/Disaster
Natural calamities/disaster some times becomes a dangerous threat to any organization. The Motijheel Branch of BRAC Bank Ltd. was heavily affected by flood for several times.
Employee turnover
Excessive employee’s turnover can be a great threat for any organization. So, BRAC Bank should concentrate on employee satisfaction
Political instability
Political condition is a great factor to consider in our country. Political instability hampers the daily banking activities.
Consumer loan Product of BBL
Salary loan: keep an extra 15 month salary in your pocket. You can get BRAC Bank Salary Loan, loan against your salary. If you are a salaried individual working in Bangladesh, plese read on Because Salary Loan from BRAC Bank has been designed with just you in our minds.
Who can apply?
ü Employed as a regular salaried staff
ü Have minimum age of 25 years, max -53 years (at the time of application)
ü If you earn a gross monthly salary of tk. 10000
Maximum Amount
ü Anywhere between 1.5 lac to 10 lac
Features
ü Loan up to 15 times of your Salary
ü No collateral of cash securities
ü Loan processed just within 24 hours
ü Flexible repayment equal monthly installment (EMI) over a period of 12 months to 60 months
ü Person with salary account with BRAC Bank will enjoy 1% less than the prevailing interest rates.
Requirements
ü Last 3 months bank statement
ü Last salary slip/ letter of introduction
ü Proof of identity
ü Proof of residence
ü Proof of employment of minimum 2 years at the current organization
Now loan: you choose while we pay? Life is good make it better when you can enjoy BRAC Bank Now loan. In case you need to purchase home appliances, furniture, computer or other consumer durables for personal use, we offer you the most appropriate solution with our Now loan.
Who can apply?
ü BRAC Bank account holder aged from 25 to 55
ü A salaried employee with minimum monthly income of tk. 10000
ü Employed in your current organization for two years.
Requirements
ü 3 months bank statement (latest)
ü pay slip required if salary paid in cash
ü Tin
ü Business proof 2 years
Documents required for Loan
- Photo
- Visiting card
- ID cards photocopy
- Letter of introduction
- Bank statement
- Loan statement if any
- Salary slips:
- Cheques:
- Cheques photocopy:
- Personal profile Or A/C op0en from photocopy
- Guarantor’s photo & personal net worth:
- Telephone No:
- TIN copy:
- Permanent address proof:
- Experience certificate:
CONSUMER LOAN OF HSBC BANK
My Loan – Home Loan
The decision to buy or renovate a home is one of the most important investment decisions you will ever make. HSBC’s Home Loan facility will assist us in purchasing new apartment or renovate your home. “Home Loan Plus” package offers a discounted Personal Installment Loan to enable us to buy home appliances, furniture and other amenities th