Bank Asia intern

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Internship Report on

“Analysis of customer's perception about Cards services"

Of

Bank Asia Limited(BAL)

Prepared for:

Mr. Chowdhury Rajkin Mohsin

Senior Lecturer, School of Business

Prepared by:

MD. Eftakhairul Alam

ID: 0930107

School of Business

Independent University, Bangladesh(IUB)

Spring, 2013

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Letter of Transmittal

Date: May 11, 2013

Mr. Chowdhury Rajkin Mohsin

Senior Lecturer

School of Business

Independent University, Bangladesh

Subject: Submission of Internship Report.

Dear Sir,

With due respect, it is a great pleasure for me to submit my Internship Report. The report entitled

“Analysis of Customers ’Perception about Card Services of Bank Asia Ltd (BAL)" which is a partial

requirement for the completion of BBA degree. I have left no stone unturned to collect data about the

cards and customer services of Bank Asia Ltd (BAL) .I have also collected data about various customers’

opinion and customers service related information’s of Bank Asia Ltd (BAL) and their major activities,

history of Bank Asia Ltd (BAL) , historical background of banks.

I have tried to merge all the necessary information gathered from different sources and knowledge

acquired from the entire BBA Program to represent this report as a unique outcome of my efforts. I firmly

believe that the suggested ways and measures excluding their limitations will be helpful enough to fulfill

the purposes of any further target. I respectfully request you to accept this report for further evaluation.

Sincerely yours

Md. Eftakhairul Alam

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Acknowledgement

In The Name Of Allah the Beneficent the Merciful.

All of admire to Allah.

First I give thanks to my almighty Allah. Next, with warm gratitude of my heart I would like

remember the names of all of them who have helped me from every side in accomplishing this

report as well as my internship program. I feel very much lucky to get a great opportunity to

carry on my internship program with such a remarkable Bank like Bank Asia Ltd (BAL). In this

regard I would also like to thank some associates of Bank Asia Ltd (BAL) Bashundhara Branch,

who had spent their valuable time to help me out and provide me necessary relevant information

and data during my internship period. Such names are Mohammad Mainul Islam (FVP&MOB),

Shaiful islam Khan Majlis (AFVP&MOP), Izhar Hossain(SEO&Credit Incharge), Jahir Islam

(EO), Mohammad Muklasur Rahman(SO&GB Incharge), Nilufar Yesmin(Officer), Imtiaz

Uddin(JO), etc. Special thanks go to the respondents, who spared their time generously, and took

the trouble of answering a detail Questionnaire and helped me to complete my study. After that,

my extreme gratitude and thanks is that person who was always with me with his ever-enlarging

helping hands, guidance and inspirations and above all ease of work.

At last, I would like to admit my warm gratitude to my honorable academic supervisor, Mr.

Chowdhury Rajkin Mohsin,Senior Lecturer of School of Business for guiding me from the

beginning to end in preparing this report. His extended helping hand, enormous assistance and

care in every step of the work have brought this report to a successful accomplishment.

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Executive summary

Achievement of high economic growth is the basic objective of present economic policy of

Bangladesh government. In achieving this objective, the banking sector plays an important role.

Bank Asia Ltd is one of the banks. Bank Asia Ltd (BAL) emerged as a new commercial bank to

provide efficient banking services and to contribute socio-economic development of the country.

The history of debit card implies that the concept of debit card is not new. History of debit card

dates back around 20 years ago, which highlighted the introduction of e-commerce and

alternative means of payment. A credit card is a piece of plastic used for purchasing goods and

services and for obtaining cash disbursements on credit terms. The use of plastic money is

originated in the United States during the 1920s, when individual companies such as hotel chains

and oil companies, began issuing them to customers for purchases made at those business.

The Bank commenced its operation on November 27, 1999. It operates in Bangladesh for a long

time as a country’s one of the good bank. Card service is one of the most important services that

BAL offers. This service is of great importance for the achievement of our banking sector and

also BAL. This bank first introduced the card service in 2006 with a vision of giving prompt and

effective banking services to its valued customers for 24 hours. Card is the most modern

payment mechanism that enables people to consume different types of product and services

without paying cash and it also enable customer to withdraw money in the mode of short term

credit from ATM booths and from branches.

The main objective of the report is to determine the competitive “Analysis of customers’

perception about Card services of BAL”. Determine the competitive standing of Bank Asia

Ltd (BAL) in the banking sector in terms of its products and services, identify the major

strengths of the banks customer service division, provide with probable solutions for the

improvement of the customer service quality and to analysis the existing customers perception

about cards services of BAL.

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TABLE OF CONTENTS:

CONTENTS PAGE NO

*PART - 1 (Working Report) 06

1. Bank Asia Limited: Company Profile 07-08

2. Company Organogram 09-11

3. Financial Highlights 12-15

4. Working Report 16-27

*PART-2 (Research Report) 28

Debit Card & Credit Card Background 29-30

Intro & Statement of Problem 31

Methodology 32-33

Limitations 34

Card Issuing Process of BAL (1.0) 34

Card issuing Process Details (1.1 - 1.10) 35-40

Analysis and Interpretation (2.0) 41

Analysis and Interpretation Details (2.1 - 2.5) 41-50

Summary of Findings 51

Recommendations 52

Conclusion 53

Appendix 54

Questionnaire 55-60

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Part-1

Working Report

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COMPANY PROFILE

Bank Asia Ltd. Is third generation bank and scheduled commercial Bank in the private sector which

established on 27th November in 1999 under the banking company act 1991 and incorporate in

Bangladesh as a public limited company under the company act 1994 to carry out banking business in

Bangladesh Bank Asia has been launched by a group of successful entrepreneurs with recognized

standing in the society. The management of the Bank consists of a team led by senior bankers with

decades of experience in national and international markets. The senior management team is ably

supported by a group of professionals many of whom have exposure in the international market.

It set milestone by acquiring the business operations of the Bank of Nova Scotia in Dhaka, first in the

banking history of Bangladesh. It again repeated the performance by acquiring the Bangladesh operations

of Muslim Commercial Bank Ltd. (MCB), a Pakistani bank. Within a short period of time Bank Asia is

able to disclose its self existence and established its own position in the market as one of the first growing

local private bank at present it has 50 branches all over the Bangladesh.

In the year 2003 the Bank again came to the limelight with oversubscription of the Initial Public Offering

of the shares of the Bank, which was a record (55 times) in our capital market's history and its shares

commands respectable premium.

The asset and liability growth has been remarkable. Bank Asia has been actively participating in the local

money market as well as foreign currency market without exposing the Bank to vulnerable positions. The

Bank's investment in Treasury Bills and other securities went up noticeably opening up opportunities for

enhancing income in the context of a regime of gradual interest rate decline.

Mission

To assist in bringing high quality to our customers and to participate in the growth and expansion of our

national economy.

To set high standards of integrity and bring total satisfaction to our clients, shareholders and employees.

To become the most sought after bank in the country, rendering technology driven innovative services by

our dedicated team of professionals.

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Vision

Bank Asia's vision is to have a poverty free Bangladesh in course of a generation in the new millennium,

reflecting the national dream. Our vision is to build a society where human dignity and human rights

receive the highest consideration along with reduction.

Values of BAL:

Place customer interest and satisfaction as first priority and provide customized banking products

and services.

Value addition to the stakeholder through attaining excellence in banking operation.

Maintain high ethical standard and transparency in dealings.

Be a compliant institution through adhering to all regulatory requirements.

Contribute significantly for the betterment of the society.

Ensure higher degree of motivation and dignified working environment for our human capital and

respect optimal work-life balance.

Committed to protect the environment and go green.

Objective of the Bank Asia Limited:

Giving full attention to the customer

Identifying customer actual needs

Improving customer service quality

Creating happy relationship with the customer

Giving importance even to smallest query

Attracting new worth through higher sales and profit

Creating image through serve the best service & product

Achieving corporate objective through joint effort.

Services:

Bank Asia provides automated teller machine (ATM), remittance, locker, Internet banking, mobile

banking, SWIFT, and centralized trade services, as well as offers stock brokerage, depository services,

and safe custody of securities to retail individuals, high net worth individuals, institutions, and foreign

and NRBs. It operates 73 branches, 11 small and medium enterprise centers, 48 own ATM booths, and

365+ shared ATM booths.

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COMPANY ORGANOGRAM

President & MD

Deputy Managing Director

Senior Executive Vice

President

Senior Vice President

Vice President

Senior Assistant Vice

President

Assistant Vice President

FAVP

Incharge Credit

Senior Officer Credit

FAVP

Incharge Foriegn Trade

Senior Ex. Officer

Export

Junior Officer

Export

Senior Ex. Officer

Import

Junior Officer

Import

Ex. Officer Incharge General Banking

Banking Officer

Clearing House

Junior Officer Clearing House

Banking Officer Customer Service

Trainee Officer Customer Service

Ex. Officer Cash In-charge

Junior Officer Cash

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Corporate Milestones

01. Certificate of Incorporation 28/09/1999

02. Certificate of Commencement of Business 28/09/1999

03. Banking License 06/10/1999

04. First Branch License 31/10/1999

05. Inauguration of Bank 27/11/1999

06. Only Bangladeshi bank to acquire operations of 02 foreign banks namely:

Bank of Nova Scotia, Canada and Muslim Commercial Bank of Pakistan

2001 (Bank of Nova Scotia,

Canada)

2002 (Muslim Commercial

Bank of Pakistan)

07. Date of IPO subscription 23-24/09/2003

08. IPO oversubscribed by: 56 times

09. Date of First Share Trading in Bourse 08/01/2004

10. Number of Shareholders and Shares (at the end of 2009)

10,868 (shareholders)

21,448,125 shares

11. Date of First Subscription with CDBL 20/12/2005

12. Date of First Script-less Trading 30/01/2006

13. Commenced Operation of Off-Shore Banking 28/01/2008

14. Commenced Operation of Islami Banking 24/12/2008

15. Member, Dhaka Stock Exchange (DSE)

16. Commenced Operation of Capital Market Division 5/08/2009

17. Number of Promoters 22

18. Number of Directors 14

19. Number of Branches 73

20. Number of SME Service Centers 10

21. Number of Agricultural/SME Branch 4

22. Number of Brokerage Branches 5

23. Number of Islamic Banking Wing 5

24. Number of ATM booths

Own - 48, Shared-240 (Q-

cash), Cash Link (125+)

25. Number of KIOSK 3

26. Number of employee till December, 2010 1240

27. Number of foreign correspondents (in 2010) 655

28. Beneficiaries from Corporate Social Responsibility (CSR) Programs

Cataract Operation - 885

H.S. Scholarship - 215

http://www.bankasia-bd.com/home/milestones


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Comp. Learning Centres (25) -

3000+ Students

29. Deposits (as of 31/12/2010) Tk.8,900.00 crore

30. Advance (as of 31/12/2010) Tk.7,900.00 crore

31. Export (as of 31/12/2010) Tk.5,842.00 crore

32. Import (as of 31/12/2010) Tk.11,140.00 crore

33. Remittance (as of 31/12/2010)

Tk.1,854.00 crore through

1236 pay-out location

34. Total assets (at the end of 2009) Tk.68,663.20 mln

35. Credit Rating Status

AA2 - Long Term ST-1 - Short

Term

36. Income tax to Government (in 2009) 959.008 mln or 31.69%

37. Statutory Reserve (in 2009) 457.238 mln or 15.11%

38. Retained for investment and future growth (in 2009) 155.795 mln or 5.15%


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Financial Highlights

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Introduction:

Bank Asia is one of the recognized private commercial bank in Bangladesh, within a short period of time

after its operations began it has created an image in the banking sector in spite of existing numerous

rivals. From the beginning till now Bank Asia is strongly committed to provide a better quality service to

the customer and at a time the authority is providing an excellent facility to the employees. Here at Bank

Asia I started my internship from the 4th of February. This is the first time I am working in a professional

environment, and I didn't find it difficult to adjust. Through this internship program I have got to learn a

lot in the banking sector, about the professional life, etc. The Bank contains three departments at a time.

General banking

Credit department

Foreign exchange

Credit Department:

Bank’s basic work is to create a channel through depositing money from the surplus unit and provide

funding to borrowers with productive investment opportunities. Thus the necessity of credit and loan

department in bank occurs. Credit is the most important department of a bank. The money mobilized from

ultimate surplus units are allocated through this department to the ultimate deficit unit (borrower). The

success of this department keeps a great influence over the profit of a bank. Failure of this department

may lead the bank to huge losses or even to bankruptcy. Credit department receives application from

client in a prescribed application form supplied by the Bank Asia Ltd, Bashundhara Branch.

The Bank implemented the system of credit risk assessment and lending procedures by stricter separation

of responsibilities between risk assessment, lending decisions and monitoring functions to improve the

quality and soundness of loan portfolio. The Bank recorded a 11.48% growth in advances with a total

loans and advances portfolio of BDT 92,329million at the end of December 2012 compared to BDT

82,820 million at the end of December 2012.

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Responsibilities of Departments:

Credit Risk Management (CRM) Department:

Review and analysis (including appraisal in case of project financing) of credit proposals,

sent by the branches and ensuring that all the elements of the credit application, analysis,

statement, reports are obtained and in order.

Assessing the Credit Risk Grading (CRG) in order to determine whether to lend or not to

lend, what should be the extent of exposure including credit structure as well as

identifying the various credit risk mitigating factors.

Preparation of credit proposal using the prescribed format for placing the same before the

Credit Committee of the Board/Board of Directors for approval and communicate the

decision to the concerned branches.

Oversight of the Bank’s asset quality.

To provide advice/assistance regarding all credit matters to Relationship Management.

Transfer the downgraded (i.e. Grade-6) loan filed to Legal & Recovery Department for

efficient exit.

To ensure that credit officers/executives have adequate experience and/or training in

order to carry out job duties effectively.

Oversight of the Bank’s credit policies, procedures and control relating to all credit risks.

Credit Administration Department:

To ensure that all security documentation complies with the terms of approval and is

enforceable.

To monitor insurance coverage with a view to ensure appropriate coverage is in place

over assets pledged as collateral, and is properly assigned to the bank.

To control loan disbursement only after all terms and condition of the approval have been

met, and all security documentation is in place.

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To monitor borrower’s compliance with covenants and agreed terms and conditions, and

general monitoring of account conduct/performance.

Past due principal or interest payments, past due trade bills, account excesses and breach

of loan covenants and covenants breaches or exceptions are referred to CRM Department

and the concerned branch for timely follow-up.

Timely correction action is taken to address finding of any internal, external or regulatory

inspection/audit.

Ensure accurate & timely submission of returns of Corporate Office and Bangladesh

Bank.

Legal & Recovery Department:

Directly manage all Substandard, Doubtful & Bad and Loss accounts to maximize

recovery.

Determine Account Action Plan/Recovery Strategy.

Pursue all options to maximize recovery.

Ensure that adequate and timely loan provisions are made based on actual and

expected losses.

Maintain liaison with the Bank’s lawyers and follow up the suit for filed cases

regularly for early settlement towards recovery of Bank’s dues.

Reviews of Grade 6 or worse accounts on regular basis.

General Policy Guidelines:

The following general policy guidelines govern the implementation of the business strategy of

Bank Asia with respect to credit risk:

1. Bank Asia makes loan only to eligible and reputable clients who are involved in

legitimate business activities and whose income and wealth are derived from legitimate

sources.

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2. Bank Asia encourages lending to society desirable, nationally, important and financially

viable sectors and will not lend for unproductive purposes or socially undesired projects.

3. At all times a policy of “know your customer” must be foremost in the credit application

processing.

4. Bank Asia extends credit in its discretion, only to qualified borrowers where the amount

and intended purpose or use of proceeds are clear and legitimate and where the amount

and use of funds is reasonable in the context of what is known about the particular client

and the intended use or purpose.

5. Bank Asia requires that borrowers have a source of repayment established at the

inception of the credit, and that any exception must be specifically addressed in the

approval of credit. There should be identified, whenever possible, a secondary source of

repayment. As with any funds received, any and all repayment sources must be legitimate

and consistent with what is known and documented about client. Borrowers must

provide, and the credit approval package must contain, sufficient information on the

borrower, business, & industry to approve the extension of credit. Satisfactory security

and collateral is required as appropriate.

6. Bank Asia discourages clients with relatively low or no funds of their own i.e. highly

leveraged clients, as clients with a relatively high ratio of borrowed to own funds tend to

face liquidity problems, with adverse repercussions on their ability to service their

obligations.

7. Bank Asia does not engage in “name lending” based only on the general reputation of the

borrower. These are cases however, where certain financial information about private

clients however, wherein certain financial information about private clients is highly

confidential and may not be disseminated. Such situations are addressed individually at

the discretion of the management.

8. Bank Asia does not normally extend any credit facility against pledge of

goods/merchandise.

9. Bank Asia’s unsecured lending practices favor extensions of credit for short term self-

liquidating transactions. To other extent possible, the maturity of loan should be matched

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to the cash conversion cycle of the transaction being financed. General- purpose loans to

finance working capital, which are either unsecured or not specifically secured by the

assets financed, and have no clean up requirement, represent policy exception unless

secured by pledged liquid collateral.

10. Overdraft lines should have an annual period cleanup period unless there is evidence of

credit to the relevant accounts two times the average credit. Loans secured by cash or

readily encashable securities may be renewed at the discretion of the approving officers.

General Procedure for Loans and Advances:

Bank Asia limited follows the general procedure for giving loans and advances as the guideline

given by Bangladesh Bank. The general lending procedure is given below:

First information sheet (FIS)

First information sheet (FIS) is the prescribed from provided by the respective branch that

contains basic information of the borrower. It contains following particulars.

1. Name of the concern with its factory location, office address and Tel no.

2. Name of the main sponsors with their educational qualification

3. Business experience of the sponsors, details of past and present business, its achievement and

failures, name of ill the concerns wherein the sponsors have involvement.

4. Income tax registration no. With the amount of tax paid for the last three years.

5. Details of unencumbered assets (movable & immovable) personally owned by the sponsors.

6. Details of liabilities with other banks and financial institutions including securities held there

against.

7. Purpose of loan sought from BAL.

8. Estimated cost of the project & means of finance.

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Application for credit line

After receiving the first information sheet from the borrower Bank official verifies all the

information carefully. He also checks the account maintains by the borrower with the Bank. If

the official become satisfied then he gives application to the bank prescribe format supplied by

the bank called Credit for request limit (CRFL).

Credit Sanction & Appraisal Process

Borrowers Credit Worthiness Analysis by BAL following 6 “C”s:

The question that must be dealt with before any other whether or not the customer can service

the loan that is pay out the loan when due with a comfortable margin of error. This usually

involves a detailed study of six aspects of the loan application: character, capacity, cash,

collateral, conditions and control. All must be satisfied for the loan to be a good one from the

lender’s (BAL) point of view.

1. Character: The loan officer must be convinced that the customer has a well defined

purpose for requesting credit and a serious intention to pay. Responsibility, truthfulness,

clean past record, true purpose and honest intention to repay the loan make up what a

loan officer calls character.

2. Capacity: The customer requesting credit must have the authority to request such and the

legal standing to sign a binding loan agreement.

3. Cash: The borrower should have the ability to generate enough cash flow to repay the

loan. This cash flow can be generated from sales or income from the sales or income,

from the sale of liquidation of assets or funds raised through debt or equity securities.

4. Collateral: The borrower must possess adequate net worth or enough quality assets to

provide adequate support for the loan. The value of the collateral security must cover the

loan exposure.

5. Conditions: The recent trend of borrower’s line of work or industry must be taken into

considerations by the lender.

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6. Control: the lender should be careful about whether changes in law regulation could

adversely affect the borrower and whether loan request meets the Bank’s and regulatory

authority’s standards for loan quality.

Collecting CIB Report from Bangladesh Bank

After receiving the application for credit line, Bank sends a letter to Bangladesh Bank for

obtaining a report from there. This report is called CIB (Credit Information Bureau) report.

Basically branch seeks this report from the head office for all kinds of loans. The purpose of this

report is to being informed that whether the borrower the borrower has taken loan from any other

bank; if ‘yes’, then whether the party has any overdue amount or not.

Making Credit proposal (CP)

Branch then has to find the right borrower by considering the following 6 C’s. These are

character, capital, capacity, cash, collateral, condition (economic). If the branch thinks that the

project is feasible then he will prepare a Proposal. Bank prepares the proposal in a specific from

called credit proposal. Significance the proposal branch sends it to head office for approval.

Credit assessment

A thorough credit and risk assessment should be conducted prior to the granting of loans, and at

least annually thereafter for all facilities. The results of this assessment should be presented in a

credit application that originates from the Relationship Manager, and is recommended by Branch

Credit Committee (BCC). The RM should be the owner of the customer relationship, and must

be held responsible to ensure the accuracy of the entire credit application submitted for approval.

RMs must be familiar with the bank’s Lending Guidelines and should conduct due diligence on

new borrowers, principals and guarantors.

Credit Applications should summarize the results of the RMs risk assessment and include as a

minimum, the following details:

• Amount and type of loan(s) proposed

• Purpose of loans

• Loan structure (Tenor, Covenants, Repayment Schedule, Interest)

• Security arrangements

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In addition, the following risk areas are analyzed:

• Borrower analysis

• Industry analysis

• Supplier/ Buyer analysis

• Historical financial analysis

• Projected financial performance

• Account conduct

• Adherence to lending guidelines

• Mitigating factors

• Loan structure

• Security

Risk Grading

All Banks should adopt a credit risk grading system. The system should define the risk profile of

borrower’s to ensure that account management, structure and pricing are commensurate with the

risk involved. Risk grading is a key measurement of a Bank’s asset quality, and as such, it is

essential that grading is a robust process. All facilities should be assigned a risk grade. Where

deterioration in risk is noted, the Risk Grade assigned to a borrower and its facilities should be

immediately changed. Borrower Risk Grades should be clearly stated on Credit Applications. 34

Project Appraisal

It is the pre-investment analysis done by the officer before approval of the project. Project

appraisal in the banking sector is needed for the following reasons:

1. To justify the soundness of an investment

2. To ensure repayment of bank finance

3. To achieve organizational goals

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4. To recommend if the project is not designed properly

Head Office Approval

The respective officer of Head Office appraises the project by preparing a summary named “Top

Sheet” or “Executive Summary”. Then he sends it to the Head Office Credit Committee (HOCC)

for the approval of the loan. The Head Office Credit Committee (HOCC) considers the proposal

and takes decision whether to approve the loan or not. If the loan is approved by the HOC C, the

HO sends the approval to the concerned branch with some conditions. These are like.

1. Drawing will not exceed the amount of bill receivables.

2. The tern over in the account during the tenure of the limit should not be less than four

times of the credit limit.

3. All other terms and conditions, as per policy and practice of the bank for such advance to

safeguard the banker’s interest shall also be applicable for this sanction also.

4. Branch shall not exceed the sanctioned limit.

5. Required charge documents with duly stamped should be obtained.

6. Drawing shall be allowed only after completion of mortgage formalities and other

security arrangement.

Sanction Letter:

After getting the approval from the HO, the branch issues the sanction letter to the borrower. The

borrower receives the letter and returns a copy of this letter duly signed by him as a token of

having understood and acceptance of the terms and condition above.

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Documentation of loans and advances

In spite of the fact that banker lends credit to a borrower after inquiring about the character,

capacity and capital of the borrower, he must obtain proper documents executed from the

borrower to protect him against willful defaults. Moreover, when money is lent against some

security of some assets, the document must be executed in order to give the banker a legal and

binding charge against those assets. Documents contain the precise terms of granting loans and

they serve as important evidence in the law courts if the circumstances so desire. That is why all

approval procedure and proper documentation shall be completed before the disbursement of the

facilities. The documents for loans and advances can be classified into two categories, namely

Charge documents & Security documents.

Disbursement

After verifying all the documents the branch disburses the loan to the borrower. A loan

repayment schedule is also prepared by the bank and given to the borrower.

Follow-up

After the disbursement of the loan bank officials time to time monitor the loan by physical

observation of the activities of the party. It is done in the following manner.

Constant supervision

Working capital assessment

Stock report analysis.

Loan classifications

Classifications Scale

1. Unclassified: Repayment is regular

2. Substandard: Repayment is irregular or stopped but has reasonable prospect of improvement.

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3. Doubtful Debt: Unlikely to be repaid but special collection efforts may result in partial

recovery.

4. Bad/loss: Very little chance of recovery

Credit Monitoring

Monitoring is a process of taking case of loan cases starts from the selection of the borrower and

remains live throughout the life of a loan.

To minimize credit losses, monitoring procedures and systems should be in places that provide

an early indication of the deteriorating financial health of a borrower. At a minimum, systems

should be in place to report the following exceptions to relevant executives in CRM and RM

team:

1. Past due principal or interest payments, past due trade bills, account excesses, and breach

of loan covenants;

2. Loan terms and conditions are monitored, financial statements are received on a regular

basis, and any covenant breaches or exceptions are referred to CRM and the RM team for

timely follow-up.

3. Timely corrective action is taken to address findings of any internal, external or regulator

inspection/audit.

All borrower relationships/loan facilities are reviewed and approved through the submission of a

Credit Application at least annually. Two possible solutions to minimize the credit loss:

Early Alert Process

Despite a prudent credit approval process, loans may still become troubled. Therefore, it is

essential that early identification and prompt reporting of deteriorating credit signs be done to

ensure swift action to protect the Bank’s interest.

Credit Recovery

Commercial Banks sanction loan to different categories of borrowers for various purposes.

Before sanctioning of loans and advances (short term loan, long term loan) bank appraises a loan

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proposal and analyze information relating to the borrower and purpose of the loan to determine

viability of the loan proposal. If the proposal is found viable and safe for lending, loan is

sanctioned and disbursed.

At the time of sanctioning loan, along with all other terms and conditions repayment period and

installment is fixed. Recovery of loan starts just after the maturity of grace period. But more

exhaustive appraisal of the loan proposal in the pre-sanction stage is not the guarantee to recover

the loan money with interest unless a built in system of supervision & follow up is applied and

proper treatment is given as and when problem arises.

Recommendations

Bank Asia, Bashundhara branch is well decorated and also have a talented pool of

employees but there is no doubt that there is a shortage of employees.

Bank should put more concentration about all categories client.

Bank Asia operating software “STELLER’’ Should be changed, because most of the time

It has got problem and hampers working attention and also delayed time.

Conclusion

After end of the report I got to learn many things about Banking related activities such as

General Banging, Credit Department, how loans are processed and finally approved , foreign

remittance, performance and trend analysis which gave me a vast knowledge about the whole

banking sector , measuring a percentage of growth year to year. In the retirement of report, I

would like to give thanks my academic supervisor and all the employees of Bashundhara branch

who have supported me to proceed and finish the report successfully.

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Part-2

“Analysis of customer's perception about Cards services of

Bank Asia Ltd”

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Debit Card

The history of debit card implies that the concept of debit card is not new. History of debit card

dates back around 20 years ago, which highlighted the introduction of e-commerce and

alternative means of payment.

The recent history of debit card indicates the rise in the usage of debit cards. A debit card reflects

the dominance of the debit card as a means of making payments, becoming increasingly popular.

This alternative means of payment is gradually gaining ground with each passing year. Debit

card shows that back in 1990, the count of debit cards in circulation was around 19 million. A

debit card also has it, that the initial years of the debit card era witnessed steep growth and by the

year 2006 there were as many as 27.8 million debit cards.

The increase in the number of debit cards have sharply declined owing to the fact that the market

is reaching a saturation point but that has not stopped debit card usage completely.

Statistically, history of debit card usage has followed a trend where one can expect the debit card

usage to rise by 9.2 million with the spending capacity to go up by 400 million.

The use of debit card boomed to 28.8 million in 2006 and is expected to reach 34.4 million in

2016.

A debit card has shown that food and drinks has dominated the scenario of the majority of the

transactions involving a debit card.

Overview on Credit card

A credit card is a piece of plastic used for purchasing goods and services and for obtaining cash

disbursements on credit terms. The use of plastic money is originated in the United States during

the 1920s, when individual companies such as hotel chains and oil companies, began issuing

them to customers for purchases made at those business. This use increased significantly after

World War II. In 1951, Diners Club issued the first Charge Card to 200 customers who could use

it at 27 restaurants in New York. With this system’ the Credit Card Company charged

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cardholders an annual fee and billed them on a monthly or yearly basis. The American Express

Company established another major charge card in 1958 as the American Express Card.

In 1950s, the Credit Card concept emerged where the bank credits the account of the merchant as

sales slips are received and assembles charges to be billed to the cardholder at the end of the

billing period. Bank of America issued the first Credit Card ‘BankAmerica’ in late 1958 in

California, USA. This system was licensed in other states starting in 1966, and was renamed as

VISA in 1976. At the same time, three different groups of banks that were not franchisees of

Bank of America began activities that would later merge to become today’s MasterCard

International. “Visa” or “Master” symbol represents the different Logo respectively.

Both organizations originally set out signing up member banks to issue cards, enroll merchants,

and/or both. Competition was fierce. Banks that offered one card could not handle the other, thus

losing money. More importantly, the merchants themselves were being forced to turn down sales

from customers who did not carry the same card the merchant accepted. In 1978 the MasterCard

International and VISA International organizations agreed to a concept of duality, in other

words, banks could honor and issue both Credit Cards.

Credit cards are introduced for the use of credit-worthy customers. Users are issued with a card

on production of which their signature accepted on bills in shops and establishments

participating in the scheme. The banks thereby guarantee to meet the bill and recover from the

cardholder through a single account presented periodically. In some cases users are required to

pay a regular subscription for the use of the service as well. An extension of the scheme allows

the repayment large sums over a period at interest. The bank guarantees to pay, for a specific

charges, certain types of annual bills (fuel bills, mobile bills etc) promptly as they become due,

whilst repayments are spread over a 12- monthly period from the customer’s current account.

Some banks are using electronic machines, which will scan cheques and dispense notes and save

time at the counter.

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Introduction

Achievement of high economic growth is the basic objective of present economic policy of

Bangladesh government. In achieving this objective, the banking sector plays an important role.

Bank Asia Limited is one of the banks. It also operates in Bangladesh for a long time as a

country’s one of the good bank. Card service is one of the most important services that BAL

offers. This service is of great importance for the achievement of our banking sector and also

BAL. Card is the most modern payment mechanism that enables people to consume different

types of product and services without paying cash and it also enable customer to withdraw

money in the mode of short term credit from ATM booths. Card is not that much an old concept.

A huge number of customers were attracted to purchase card facility, especially when Bank Asia

and other commercial banks launched it in Bangladesh. It has many-fold benefits that really

attract a wide segment of market in the personal banking sector, in Bangladesh. Despite the

market growth of card in banking sector, it was hypothesized that with the coming up of a large

number of local banks into issuing Cards, it might be a threat to BAL about retaining its

customer base. So, this situation has created an interest to know about the customer satisfaction

level of BAL. So, the main concentration of the present study would be on the “Analysis of

customers’ perception about Cards services of BAL”

Statement of the Problem

BAL has been launching new products along with the credit card services in order to satisfy their

targeted customers. Since this study is entirely devoted to analyzing BAL cards services, it seems

essential to study as to what extent the existing customers of BAL card are satisfied. Naturally, it

has become a great need for the purpose of the present study to get to know of the customers’

perception about BAL cards. These days in Bangladesh people are found to use card to a great

extent. Local banks also have started issuing cards. There is, therefore, an obvious market growth

of cards in the banking sector. In spite of this, since local banks have entered the market for

providing card services, it might be a problem for BAL to retain its reputation as a provider of

card services to customers. In view of this, a study on customers’ satisfaction with respect to

BAL cards services has been felt important. The problem of the study may be stated in terms of

following questions:

32

Is Bank Asia Ltd (BAL) effectively doing its jobs in regard to Cards service?

What do the customers feel about the Card services of BAL?

Rationale of the Study

The findings of this study will help consumer banking of BAL to understand the cardholders’

satisfaction level in regard to card services, as well as to know about their perception regarding

its credit card. The Card department of BAL would be in a position to decide whether they need

to build new strategies to meet customers’ ever changing needs. This study will also help the

authority of BAL card division to find out the major problems of its card and also to get an idea

about how they should offer better services compared to other banks. BAL will also be able to

know how far the cardholders are satisfied with their card services.

Methodology

Population of the Study

The Card holders of BAL who came to the branch for making Card’s payment and other queries

regarding their card status.

Sampling Frame

A non-probability sampling procedure was used for this report. Customers who come to the

branch remain busy. The judgmental sampling procedure was used here to select the sample

units who could allow them to respond to the questionnaire.

Sample Unit

Each cardholder is a sample unit.

33

Sample Size

The population of Cardholders of BAL has been divided into two divisions.

Debit Card

Credit Card

Within one week a total number of 49 cardholders of both kind were selected from the available

customers of cards who came to the Branch. Considering the time constraint in branch the

sample size was reduced.

Procedure of Collecting Information

Primary Data

For the purpose of collecting primary data one set of questionnaire (with structured and

unstructured questions) has been administered. In addition to this, face to face interview and

interview over telephone have been conducted.

Secondary Data

For the sake of collecting secondary information, books, journals and documentary evidences

available with Bank Asia Ltd have been used. Some published materials of the bank under study

have also been studied as a source of secondary data. They are:

BAL internal web site

BAL bulletin

Brochures & guide book for different features regarding card.

Questionnaire

The questionnaire administered to the respondents has been divided into two sections. Section I,

which is on customer satisfaction level of card services of BAL, consists of six questions. All

these questions have been designed using 5-point scale starting from highly satisfied to highly

dissatisfy. All these questions are both open ended & close ended.

34

Procedure of Data Analysis

For the purpose of analysis, data have been presented in terms of percentage. Besides, tables,

charts and graphs have also been used. For this research, MS Excel has been used for the purpose

graphical presentation and percentage calculation.

Limitations of the study

Large-scale research was not possible due to restrictions posed by the

organization.

Original data could not be collected in some cases because of the BAL strict

adherence to the principle of confidentiality.

This study has not covered the prepaid cardholders, as they are very few in

number.

1.0 Card Issuing Process of BAL

The process begins with compiling applications for both kind of cards. Some different procedure

is used for credit card. With proper documentation, the bank gathers necessary information

regarding the applicants. Then the risk assessment division checks the application and sends it to

the Contact Point Verification (CPV) for further testing of the authenticity of the documents.

They also approve or refuse the application afterward and determine the credit limit for the

client. These jobs can be done either by the organization itself or through outsourcing. Then the

bank prepares a master file and issues the cards and then delivers them to the customers. After

receiving the card, cardholder can activate the card through the call centre.

35

1.1Papers/documents required for issuance of Local Credit Card

Items with asterisk (*) are mandatory. Depending on customer profile and business relation bank

may ask for other documents if necessary on case-to-case basis.

Name of Documents Service

Holder

Proprietorship Partnership Limited

Company

2 copies of passport size

photograph

Yes Yes Yes Yes

TIN Certificate* Yes Yes Yes Yes

Trade License* Yes

Salary Certificate* Yes

Letter of Comfort (From employer) Yes

Bank Statement For last 6

months

For last 1 year

personal & Co.

A/C

For last 1 year

personal &

Co. A/C

For last 1 year

personal & Co.

A/C

Proof of Residence:

Gas/Electricity/Mobile Phone

Bill/Land Phone Bill

Yes Yes Yes Yes

Blue Book of own Vehicle (if

applicable)

Yes Yes Yes Yes

Other Bank Credit Card bill (if

applicable)

Yes Yes Yes Yes

Memorandum and Article of

Association

Yes

Deed of Partnership Yes

Letter of Incorporation Yes

Corporate Guarantee Yes

Letter of Commencement For Public

Limited Co.

Copy of

Passport/Driving/License/Visiting

Card

Yes Yes Yes Yes

Club Membership, if any Yes Yes Yes Yes

However, minimum charge documents (DP Note, Letter of Lien, Letter of Encashment, Letter of

Guarantee etc.) to be obtained.

1.2Papers/documents required for insurance of Debit Card/Pre-Paid Card

Two copies of passport size photograph.

Customer should maintain a deposit (SB/CD/STD) A/C with any branch of BAL.

Other than BAL account holders may also avail Pre-Paid card against deposit of money.

36

1.3 Papers/documents required for issuance of International Credit Card

Two copies of passport size photograph.

TIN certificate.

Photocopy of passport from 1 to 7 pages including endorsement pages if any.

Lien confirmation of RFCD A/C is required from the concerned Branch/Bank for

issuance of card against RFCD A/C.

For issuance of card against the balance in ERQ A/C maintained with us or with other

bank, lien confirmation should be obtained from the respective Bank/branch.

Or issuance of card against new exporters and importers/producers quota relevant papers

such as, recommendation letter from EPB/ copy of tax return etc. are required.

1.4 Range of Cards offered by Bank Asia Ltd

Dual Card (two in one): Single Card with double benefits. No hassle to carry two cards

(local and international). A single credit card can be used both locally and internationally

to withdraw cash from ATM for POS transaction. This is the special feature of BAL

Visa card.

Debit Card: Visa debit card is mainly tagged with deposit account (CD/SB/STD) that is

automatically debited from the A/C having available balance. Debit card can also be

used for purchasing goods, services, payment of utility bills etc as well as withdrawal of

cash from ATM.

Pre-Paid Card: Those who have no account with BAL may avail Pre-Paid card

facilities. The Pre-Paid cardholders pay first buy later. Pre-Paid card offers the

convenience and security of electronic payment in situations where one might otherwise

use cash, such as birthday gift or a monthly allowance for a young adult. Examples

include gift cards and salary payment etc.

1.5 Key Benefits of Bank Asia Ltd Card

Withdrawal Fee: For withdrawals of cash from BAL ATM by BAL cardholders no cash

advance fee is necessary and from any other Q-cash ATM the fee is Tk.10 only. BAL is the only

37

bank offering such unique facility. Moreover, our VISA Cardholders can also withdraw cash

from any Visa logo ATM locally and internationally

Acceptability: International/Dual card is accepted all over the world at millions of outlets and

ATMs. A Dual card is also accepted in most of the big cities like Dhaka, Chittagong, Khulna,

Rajshahi, and Sylhet at more than 10,000 outlets including 4500 POS. It covers various kinds of

merchants like hospital, hotel, restaurant, department store and the card has accessibility to any

outlet having VISA logo.

Credit Facility: Bank Asia Ltd. Visa Credit card offers maximum 45 days credit facilities free

of interest and minimum payment is 5% of outstanding billing payment for easy repayment and

convenience of the customers.

Supplementary Card: A Principal cardholder (local) may apply for more than one

supplementary card where one supplementary card is free. Expenses made by supplementary

card will be charged to the principal card.

Advance against Credit card: BAL cardholder can take advance as term loan up to 50% of the

card limit to be repaid on the monthly installment basis. Any POS transaction over TK. 20000

but not exceeding 50% of the credit limit is convertible to Personal loan/CCS and to be repaid on

monthly installment basis. Repayment period of such loan may be from 6 months to 36 months.

Overdraft Facilities: Overdraft facilities up to 80% of the credit card limit may also be allowed

for payment of the installment of scheme deposit with our Bank.

Payment of Utility Bill: Payment of utility bills like telephone bills, gas bills, electric bills,

water bills, may be settled by card.

38

1.6 FEES & CHANGES FOR VISA CARDS

CREDIT CARD

SL

NO

Particulars Dual Card International Card Local Card

Classic Gold Classic Gold Classic Gold

01

02

Annual/Renewal

fee (Principal Card)

Annual /Renewal

fee Supplementary

Card-Loan

One

Supplementary

Card is free

$40

-

$80

-

$35

-

$70

-

Tk. 1000

Tk.500

Tk. 1800

Tk. 900

03

04

05

06

07

08

09

Card replacement

fee

Late payment fee

Cheque return fee

Statement Retrieval

fee

Charge Slip

Retrieval fee

Outstation Cheque

collection fee

PIN reissue charge

$20

10

5

5

10

10

10

$30

10

5

5

10

10

10

400

250

100

50

150

100

200

500

250

100

50

150

100

200

10 Excess limit

Charge

10 15 350 350

11 Cash Advance Fee

Cash advance fee

within the Q-Cash

Network:

2% of Withdrawal amount or Tk. 125 whichever is higher for local card

and 2% of advance amount or $3 whichever is higher for international

card.

1) BAL ATMs - No cash advance fee

2) Other ATMs - Tk. 10 per transaction.

12 Minimum Payment

Charge

5% of outstanding amount or $25 whichever

is higher

5% of outstanding amount

or Tk. 500 whichever is

higher

39

13

14

15

16

Interest Rate

Cash Advance

Interest

Interest free days

Interest on advance

against credit card

2.50% per month

2.50% per month

Maximum 45 days

12% per annum

DEBIT CARD / PRE-PAID CARDS

SL No Particulars Taka

01.

02.

03.

Annual/Renewal fee.

Debit Supplementary Card fee (One Supplementary Card

is free).

Replacement Fee

Tk. 345

Tk. 345

Tk. 345

1.7 Repayment

Credit Card account statement is generated on monthly basis if there is any outstanding

in the cardholder account.

If the cardholders repay the entire amount within the due date of payment, no interest

will be charged and thereby cardholders enjoy maximum 45 days credit facilities without

interest for POS transactions.

If the cardholder repay the minimum payment amount as shown in the credit card

account statement within the payment due date then no late payment penalty will be

charged.

1.8 Calculation of minimum payment

(i) When the outstanding in the statement is less than or equal to the credit limit, the minimum

repayment for the current month is as under:

40

1. For International Card: 5% of the billing amount or USD 25 whichever is higher. If the

billing amount is less than USD 25, it should be paid in full.

2. For Local card: 5% if the billing amount is Tk.500 whichever is higher. If the billing

amount is less than Tk.500, it should be paid in full.

(ii) When the billing amount in the card account statement is more than the credit limit, the

minimum payment is 5% of the credit limit plus excess amount of credit limit.

(iii) If the cardholder fails to pay the minimum of the current month bill then in the next month

the minimum payable amount will be current month minimum plus previous month minimum

amount.

1.9 Interest

In case of POS transactions, if entire amount is not paid within payment due date,

interest will be charged @ 2.5% on the outstanding balance on daily basis from date of

transaction.

In case of cash withdrawal, interest will be charged @ 2.5% per month on daily basis

from the date of transaction irrespective of payment due date

1.10 Cash advance fee

BAL card to BAL ATM: No fee.

BAL card to other Q-Cash ATM: Tk.10 per transaction.

BAL card to other ATM: 2% of transaction amount or Tk.125 whichever is higher.

For international card: USD 3 or 2% of transaction amount whichever is higher.

41

2.0 Analysis and Interpretation

This part of analysis and interpretation relates to:

1) Overall scenario of BAL cards in Bangladesh,

2) The major benefits of BAL cards,

3) The satisfaction levels of BAL cardholders,

4) The annual fees and charges for the Credit card of BAL as compared to other banks’ card fees

and charges.

5) The factors causing dissatisfaction to the cardholders in regard to BAL card services.

2.1 Overall Scenario of BAL cards in Bangladesh

Bank Asia Ltd is a major financial institution providing a full range of banking services in

Bangladesh. It differentiates itself from other competitors by the quality of its service. The bank

increasingly invested in people, technology and premises as its business grew in relation to the

country's thriving economy. The card, which is also called “plastic money”, through a new

phenomenon in business and transaction arena, had already won the hearts of millions across the

globe. At present, it has the large customer base. BAL is both an acquirer and issuer, which mean

that most of the merchants who accept cards are BAL’s merchants. Recently, other financial

institutions are offering their card services. Despite the market growth of card in other financial

institutions, it has been found that BAL is still having the good market share.

42

2.2 The major benefits of BAL card

This section has analyzed the major benefits of BAL card. They have been shown in table

Benefits of BAL card

Major benefits of BAL card

Number

Of cardholders Percentage

Auto bills pay 20 40.82%

E-statement 11 22.45%

Advance against Credit card 9 18.37%

Rewards 6 12.24%

Supplementary Card 3 6.12%

Total 49 100

The above table shows that Auto bills pay is the major benefit of BAL card according to 40.82

percent cardholders. Auto bills pay is the simplest and most convenient way of paying the

monthly bills of the mobile phone, electricity, and cable TV, Internet etc. The table reveals that

22.45 percent cardholders regard e-statement as a sure and reliable way of receiving card

statements anywhere in the world. 18.37 percent cardholders believe that Advance against Credit

card provide the facility of unlimited purchasing power. Reward has been designed to greatly

benefit of the valued card members. The survey indicates that 12.24 percent cardholders consider

it to be one of the effective benefits. Only 6.12 percent customers think that banking is possible

at the fingertips through Supplementary Card. They love to use Supplementary Card, which they

feel, makes their life easier.

43

2.3 The satisfaction levels of BAL cardholders

In a monopoly business situation, companies can stay carefree of their customers’ satisfaction

level. That can spell disaster while other competitors emerge into the scenario. It is of great

importance to BAL to make sure that it does not walk towards making that mistake. A best way

to avoid making such mistakes is to continuously assess customers’ satisfaction level.

Customer Satisfaction is not easy to measure and it is subject to change unnoticed. It is important

for the BAL to address these changes and quickly respond to it.

The following tables were designed from the survey outcome about customer satisfaction of

Cards services of BAL.

Table: Customer Satisfaction on BAL’s services & benefits regarding cards

Scale Number of cardholders Percentage

Highly satisfied 9 18.37%

Satisfied 23 46.94%

Neither satisfied nor dissatisfied 14 28.57%

Dissatisfied 3 6.12%

Highly dissatisfied 0 0%

Total Respondents 49 100%

Table: Customer Satisfaction on BAL undivided attention to card related transactions



44

Satisfied 23 46.94%


Dissatisfied 4 8.16%



Table’s # shows that a majority of the customers (i.e., 46.94%) were “satisfied” with BAL’s

“services & benefits of credit card” and “employees’ undivided attention” while performing

transactions. In the first situation 18.37% were “highly satisfied” while in the second situation

20.41% were “highly satisfied”. A negligible proportion of customers (i.e., 6.12% & 8.16%) in

the first situation and in the second situation were “dissatisfied”. Both the tables reveal that none

was “highly dissatisfied”.

Table: Customer’s overall satisfaction on the services provided by BAL employees



Satisfied 26 53.06%


Dissatisfied 0 0%



It is evident from table (referring to customers’ overall satisfaction on the services provided by

BAL employees regarding cards) that a great majority of the customers were “satisfied” as

45

against none of the customers who were “dissatisfied” and “highly dissatisfied”. But the overall

picture shows that a good many customers, that is, 30.61% customers were “highly satisfied”

with the services provided by BAL employees in regard to card.

Customers’ ranking of the factors while acquiring Credit card

This section is devoted to analyzing the ranking of factors considered by the customers (in order

of their importance) at the time of their acquiring cards. This analysis is based on the customers’

responses to question # Q.8 (refer to appendix). Question # Q.8 refers to ranking of factors. Rank

1 indicates “most important”, rank 2 second most important and so on. The following table

shows the survey result in this regard.

Table: Ranking of factors considered by the customers at the time of acquiring Credit cards

Ranking Factor Rank Number of Cardholders Percentage

Cost of acquiring the

product (Credit card)

1 14 28.57%

Quality of the product

(Credit and Debit

card)

2 11 22.45%

Products’ features 3 8 16.33%

Reputation of Brand 4 7 14.29%

Procedure of acquiring

the product (Credit

card)

5 6 12.24%

After sales Services

from BAL

6 3 6.12%

The above table shows that “cost” factor ranks first. The highest percentage of customers (i.e.,

28.57%) regarded cost as the most important factor at the point of their acquiring credit cards.

According to 22.45 percent of respondents, the “quality of the product” is the second

major factor while they think of acquiring credit card.

“Credit card features” ranks 3rd while the customers acquire credit card.

46

“Reputation of Brand” is the 4th important factor as per the ranking given by 14.29

percent.

“Procedure of acquiring credit card” has been ranked 5th

by the customers while they

think of acquiring credit card.

2.4 The annual fees and charges for the credit card of BAL as compared to

other banks’ credit card fees and charges

This section has analyzed the annual fees and charges for the credit card of BAL as compared to

other banks’ credit card fees and charges. The following table and figures are based on the

outcome of survey.

Table: Annual fees of BAL local credit card compared to other bank’s credit card

Name of the bank Visa card Gold (Int) Visa card Gold (local)

Bank Asia Ltd TK.4750 TK.1800

Prime Bank Limited TK3500 TK.1500

National Bank TK.2800 TK.1200

The above table shows the annual charges of credit cards of three different banks located in

Dhaka. The banks are Bank Asia Ltd, Prime bank limited and National bank. These banks offer

Master gold and Master silver card for the customers. The table indicates that the annual fee of

BAL credit card is higher than that of other two banks. The annual fee of BAL Master silver card

is also higher than that of the other two banks.

47

Customers’ perception regarding annual fees of BAL credit card services

This section analyses customer’s perception about the annual fee of BAL credit card.

Table: Customers’ perception regarding annual fee of BAL credit card services

The above table indicates that according to the customers (i.e., 40.82%), annual fee of BAL credit card is

very high while a negligible proportion of customers (i.e., 10.20%) consider this fee to be low.

Customers’ views on interest rate of BAL credit card

This section analyses the customers’ views relating to interest rate of BAL credit card services. These

views are the reflection of their perception about the interest rate of BAL credit card. Table has shown

this.

Scale No of cardholders Percentage

Very High 20 40.82%

High 16 32.65%

Moderately High 08 16.33%

Low 05 10.20%

Total 49 100%

48

Table: Customers’ views relating to interest rate of BAL credit card

The above table reflects that according to the customers (i.e., 42.86%), interest rate of BAL credit card is

very high while a negligible proportion of customers (i.e., 8.16%) consider this rate to be low.

Both the tables in the above indicate the customers’ perception about the annual fee and interest rate

of BAL credit card. Both the charges, as most of the customers perceive, are very high.

2.5 Factors causing dissatisfaction to the cardholders in regard to BAL credit

card service

This section has made an analysis of the factors causing dissatisfaction to the cardholders in

regard to BAL credit card services. This is the outcome of what the cardholders feel about the

key factors that caused their dissatisfaction regarding BAL credit card.

Table: Key factors leading to dissatisfaction of BAL credit card users

Key factors Number of cardholders Percentage

High annual fee and interest rate 20 40.82%

Complex term and condition 10 20.41%

Scale No of cardholders Percentage

Very High 21 42.86%

High 15 30.61%

Moderately High 09 18.37%

Low 04 8.16%

Total 49 100%

49

Limited opportunity to use credit

card 10 20.41%

Unwillingness of shopkeepers of

accepting card payment 9 18.37%


The above table indicates that according to most of the cardholders (i.e., 40.82%) high annual fee

and interest rate is the key factor of dissatisfaction of BAL credit cardholders. They think that the

time limit (which is within 45 days) for card payment is very short. After 45 days if they want to

make the payment, they have to pay a high interest charge on the amount they used. 20.41%

cardholders think “complex terms and conditions” and “limited opportunity to use credit card”

are both, in order of importance, the second factor of cardholders’ dissatisfaction.(18.37%) of the

customers’ view that unwillingness of shopkeepers to accept card payment is another important

factor causing their dissatisfaction.

Analysis of cardholders’ views on unpleasant incidents while using credit

cards

This part addresses itself to whether the cardholders faced any embarrassing incidents at the time

of their using credit cards for making payment. According to the respondents (i.e., cardholders),

it deserves mention that the incidents they encountered are excessive bills, ghost billing and

unnecessary denial of credit cards by the merchants.

50

Figure: Cardholders’ responses about unpleasant incidents (such as excessive bills, ghost billing,

and unnecessary denial)

From the figure it is clear that a great majority of cardholders (i.e., 70%) admitted that they faced

a number of unpleasant/ embarrassing incidents while they used BAL credit cards. On the other

hand, 30% cardholders mentioned that they did not face any embarrassing incidents while using

BAL credit cards. Their statements about these incidents are as follows:

Excessive Bills: Some cardholders have referred to excessive bills involving wrong

calculation, and they have pointed out that it takes a lot of time and efforts to resolve the

dispute between cardholders and card division.

Ghost Billing: One respondent narrated that he got a bill amounting 5000 taka from an

unknown shop. However, after proper inquiry, it was revealed that it was a mistake by the

computer program maintaining credit card dealings.

Unnecessary Denial: Some respondents mentioned that they were embarrassed in a

restaurant when the restaurant manager demanded cash payment instead of accepting

credit card.

70

30

0

10

20

30

40

50

60

70

80

Yes No

Ca

rdh

old

ers

' re

sp

on

se

s in

p

erc

en

tag

e

Options

51

Summary of Findings

The following findings emerge from the analysis:

Despite the market growth of credit card in other financial institutions, it was found that Bank

Asia Ltd is still having the good market share.

According to the feedback of the survey analysis, Auto bills pay, e-statement, Advance against

Credit card, Reward and Supplementary Card are the major benefits of BAL Credit card.

Majority of the respondents (i.e., 46.94%) were satisfied with BAL services and benefits from

card.

In case of credit limit of BAL credit card, quite a good majority of the customers were dissatisfied

while a very poor percentage of customers were satisfied.

The highest percentage of customers (i.e., 28.57%) regarded “Cost” as the most important factor

at the point their acquiring credit cards. “Quality of the product”, “Credit and Debit card

features”, “Reputation of Brand”, “Procedure of acquiring credit card” and “After-sales-service”

were considered the second, third, fourth, fifth and sixth important factors before acquiring credit

cards.

From the survey it has been found that BAL charges higher interest rate and annual fee as

compared to other two banks (such as Prime Bank Ltd and National Bank). Majority of the

cardholders were not satisfied with the annual fee and interest rate of BAL credit card.

BAL cardholders can use their cards in ATM machine. Other banks are also using ATM machine

but that’s only for debit card, not for credit card. So, Bank Asia Ltd still holds the good market

share in card services.

High interest rate has been found to be the key factor for the dissatisfaction of most of the

customers (i.e., 40.82%). They think that the time limit for card payment (within 45 days) is very

short. After 45 days if they want to make the payment, they have to pay a high interest charge on

the amount they used.

30% cardholders reported that they did not face any problem by using BAL credit card. But an

overwhelming majority of the cardholders (i.e., 70%) stated that they faced several times

unpleasant and embarrassing incidents such as excessive billing, ghost billing etc while they used

BAL credit card for making payment.

52

Recommendations

BAL card division is very much inflexible about the credit limit. In general, it does not

increase the credit limit before one year. Sometimes it takes more than a year for

enhancing the credit limit. But other banks like Prime bank, National bank are more

flexible about credit limit. Bank Asia Ltd is required to be flexible in this respect.

Comparing BAL with other banks in respect of different charges, it has been found that

annual fees of BAL credit card are higher than those of other banks. So, BAL should

reduce its annual fee and other charges to enhance the satisfaction of customers.

Cards division may be recommended to expand its presence in different types of shops

and commercial centers so that people get more opportunity to use them. Middle class

commercial centers can be put under this consideration.

Merchants need to be encouraged to accept credit card payment in addition to cash

payment. This can be done by granting them a certain percentage or an amount of

additional pay for each deal. This is likely to enable them to get an additional amount on

their sales against credit card payment.

Bank Asia Ltd excelled other competitors by dint of quality of services and reputation.

Therefore, for customers’ satisfaction, BAL needs to publish annual report and other

detailed information regarding credit card.

Card division is required to adopt and implement accurate programs that will give error-

free calculations, because miscalculation is a gross mistake that can adversely affect the

organizations’ reputation and reliability.

53

Conclusion:

Card is an immensely important mechanism of making payment all over the world. Card services

have changed the dimension of life style of a section of people worldwide. To meet the growing

need of the customers, Bank Asia ltd has introduced “Card” facility, and has been offering

banking services including credit card services round the clock. Card is not only a piece of

plastic card; it is a safer substitute for cash and is the ideal mode of payment worldwide. People

feel much secured while they carry card for the purpose of making payment in distant places.

Bank Asia Ltd is the one of them in respect of providing credit card services in Bangladesh. BAL

captured the market rapidly and its number of cardholders is increasing every year. But, since

other banks (such as Prime Bank Ltd, National Bank, Etc) coming into this market, BAL has

been facing a keen competition. In the current situation, the competition with other banks in

respect of card services appears to be a threat to BAL.

After analyzing the customer’s perception about Card it can be said that Bank Asia Ltd is

holding the good market share as well as a very good image and position in the market except for

a few issues. In the analysis, it can be seen that the annual fees and late payment fees of BAL

card are very high as compared to other banks. BAL is not flexible about the credit limit

compared to other banks and they take long time for processing the card. High interest rate,

complex terms and conditions, limited opportunity to use credit card and unwillingness of

shopkeepers in accepting card payment are the main reasons for customers’ dissatisfaction. So,

to sustain and increase the performance of credit card, BAL should keep watchful eyes on those

issues. BAL needs to put in all out efforts to retain the existing customers. BAL, for the purpose

of overcoming the problems associated with its credit card services, needs to re-engineer its

credit card services in terms of reducing interest rate and annual fee, increasing the number of

merchant outlets and ATM terminals, as well as enhancing multi-dimensional service facilities

for the customers. To conclude with the passage of time, credit card is gradually making its road

into the economic domain of Bangladesh with increasing potency. The growth of card culture in

Bangladesh is promising. Arrival of new banks, in the market justifies this.

54

Appendix:

1. Interaction with Customers and Bank Officials.

2. http://www.bankasia-bd.com

3. Bank Asia Ltd profile

4. Card leaflet

5. Bank Asia Ltd annual report

6. Questionnaire for Cardholders

55

Questionnaire for Cardholders

Section: 1: Branch Service

Q. 1 All the things considered (orderliness, environment, cleanliness etc.), what is your satisfaction level

in terms of the branch’s overall services of BAL?

a) Highly satisfied

b) Satisfied

c) Neither satisfied nor dissatisfied

d) Dissatisfied

e) Highly dissatisfied

Section: 2: Satisfaction level of Card services of BAL

Q. 2 Services & benefits from BAL regarding credit card?

a) Highly satisfied

b) Satisfied


d) Dissatisfied


Name:

Account / Credit Card Number:

Date:

Branch:

56

Q.3 BAL employees’ undivided attention to Card related transactions?

a) Highly satisfied

b) Satisfied


d) Dissatisfied


Q.4 Services from BAL during emergency situations?

a) Highly satisfied

b) Satisfied


d) Dissatisfied


Q.5 Using of BAL Card in different booths?

a) Highly satisfied

b) Satisfied


d) Dissatisfied


57

Q.6 Credit limit on the BAL credit card?

a) Highly satisfied

b) Satisfied


d) Dissatisfied


Q.7 Overall services from BAL employees?

a) Highly satisfied

b) Satisfied


d) Dissatisfied


58

Section 3: Credit card of BAL

Q.8 Please identify the factors you consider while you think of acquiring Credit cards and then rank

them in order of importance (Most important = 1, Second most important = 2 and so on).

a) Reputation of Brand

b) Quality of the product (Credit and Debit card)

c) Procedure of acquiring the product (credit card)

d) Products’ Features

e) After-sale service from BAL

f) Cost of acquiring the product (credit card).

Q.9 Do you know that BAL launches different types of facilities/services related to credit card?

Yes

No

Q.10 If yes, please state those facilities / services and also specify which one is most effective?

Facilities:

1) _____________________________________________________________________

2) _____________________________________________________________________

59

3) _____________________________________________________________________

4) _____________________________________________________________________

Most effective one:

_____________________________________________________________________

Q.11 Please specify the reasons for dissatisfaction (if any)?

a) High interest rate

b) Complex terms and conditions

c) Limited opportunity to use credit card

d) Unwillingness of shopkeepers of accepting card payment

e) Any other (please specify)

___________________________________________________________

Q.12 How is the annual fee of BAL credit card?

a) Very High

b) High

c) Moderately High

d) Low

Q.13 How is the interest rate of BAL credit card payment?

a) Very High

b) High

c) Moderately High

d) Low

60

Q.14 Have you ever had any problem in using credit card?

Yes

No

If yes, please specify the problem(s)

______________________________________________________________________________

______________________________________________________________________________

Q.15 In your opinion, what can BAL do to improve on the level of customer satisfaction?

_____________________________________________________________________

_____________________________________________________________________

Q.16 Please gives some suggestions regarding the improvement of BAL credit card.

Thank you very much for your most sincere help & cooperation.

Thank you very much for your most sincere help & cooperation.

Date post:	28-Jan-2023
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