a comparative analysis on credit card: fees, charges, documentation and customer satisfaction of the...

CHAPTER 1

INTRODUCTION TO THE REPORT

There are a number of issuers that have already strengthened their positions in the

Credit Card Market in Bangladesh. City Bank Ltd. (CBL), as one of the country’s

leading bank in the backdrop of the growing demand and positive response in the

market and considering the potentiality to enter into Credit Card Business. In this

attempt, a comparative analysis on the existing Credit Card in terms of fees, charges

documentation and customer satisfaction will be a guiding light to identify the

prospects for the Bank.

1.1 ORIGIN OF THE STUDY

This research paper has been prepared as a part of the Internship Program of Bachelor

of Business Administration of Patuakhali Science And Technology University. The

report titled: A Comparative Analysis on Credit Card: Fees, Charges, Documentation

and Customer satisfaction of The City Bank Ltd. is a out come of three months’ long

Internship Program at The City Bank Ltd. The report topic was approved by the faculty

supervisor to satisfy the organizational requirements and fulfillment of the internship

program. This report has been prepared under both of their direct supervision.

1.2 OBJECTIVES OF THE STUDY

The broad objective of the study is to draw an overall view of the credit card market

and then identify the prospects of CBL. The specific objectives of the study are:

To make an overview on the retail banking activities of The City Bank Limited

To discover the preferred attributes and satisfaction level of the clients of CBL

to choose credit card.

To analyze the services offering and charges of CBL regarding Credit cards

comparing with other banks.

A Comparative Analysis on Credit Card: Fees, Charges, Documentation and Customer satisfaction of The City Bank Ltd. of 54

To identify the weakness and problems of the Credit card service offering of To

suggest necessary measures to improve the service quality of the Branch and the

CBL as a whole.

1.3 SIGNIFICANCE OF THE STUDY

The report titled: A Comparative Analysis on Credit Card: Fees, charges,

documentation and customer satisfaction of The City Bank Ltd. is prepared as a

requirement of the three months long internship program at The City Bank Limited.

Entering into a new line of business requires careful research and analysis on the

market and competitors’ strategies, strengths, weaknesses etc. Under this circumstance

a comparative analysis on the existing Credit Card Market would be very helpful for

the bank to accumulate various data and information regarding the product/service

offerings, customer bases, customers’ satisfaction level etc and in the process help to

explore opportunities and set strategies etc. It would be a huge boost for me to get

acquainted with the credit card business. So this study is very significant for both the

bank and me.

1.4 EXPECTED FINDINGS OF THE STUDY

Prior to all research works, there are some expected results, which are hypothesized for

the evaluation of the study. The expected findings of the study were:

To analyze the services offering and charges of CBL regarding Credit cards

comparing with other banks. in the process of card delivery times, interest rate,

merchant pricing, different fees & charges

Customers’ credit card selecting criteria, attitude of keeping various cards,

their wants, needs that can be overcome by CBL.

CBL’s sources of areas of improvement in the whole process of credit card

business.

Cardholders’ personal background regarding their age, income, occupation

and education to evaluate their card usage pattern, habits, and other features.

To identify the weakness and problems of the Credit card service offering of

CBL (Dhaka Chamber Branch)


1.5 METHODOLOGY OF THE STUDY

The whole system of data collection and analysis included the following procedures:

1.5.1 Sources of data

Both primary and secondary sources of data have been used to gather the necessary

information for the analyses of the study. Primary data sources are the cardholders and

card offering organizations. The secondary data sources are the organization booklets

of charges and fees, application forms, credit card agreements of the card offering

organizations.

1.5.2 Sampling Technique Used

a) Population:

There are two different finite population involved in the study. They are

i) issuers

ii) cardholders

Of the four following banks:

1. The City Bank Ltd.(CBL)

2. Bank Asia Ltd. (BAL)

3. Dutch Bangla Bank Ltd. (DBBL)

4. Eastern Bank Ltd. (EBL)

b) Sampling Design and Sample Size:

Currently 9 banks are providing credit card facility. Among these four issuers were

selected for the interview. But, as the population size of cardholders is large, it was

difficult to determine a representative sample size. So, a purposive quota sampling was

used for the cardholders. The total sample size of cardholders that were interviewed

was 122. The Cardholders were selected on a convenient basis for the face-to-face

personal interview as well as the telephone interview.


Issuers Sample Size Percentage

CBL 84 69

BAL 15 13

DBBL 12 10

EBL 10 8

Total 122 100

1.5.3 Data Administering Method

The cardholders and the issuers were personally interviewed. Due to some

inconvenience and also to avoid wastage of time, some respondents were also

interviewed over the telephone by making them understand the technical terms. Two

questionnaires were developed to collect all the data and information.

1.5.4 Techniques of Data Analysis

Quantitative approaches like frequency distribution, cumulative percentage

measurement have been used for analyzing the collected data. Some analytical tools are

also used for analyzing marketing research. For example, to determine the relative

position of various card issuers on a single attribute, Cumulative Point Average (CPA)

scale has been used. The formulas for these tools are described as under

CPA of a factor =

Here, W = Total weight for the factor on a scale

= Frequency of the factor (f) x Weight assigned to the scale (w)

N = Number of total respondents

Finally, to give the analyzed data a structural figure and express them in a constructive

manner, some standard computer software was used which are MS Word 2000 and MS

Excel 2000.


∑W

N

1.6 LIMITATIONS OF THE STUDY

There are some specific problems and limitations that were faced during the entire

process of preparing the report. Some of them are -

Because of time and cost constraints, it was not possible to generate a

representative sample size and also to use simple random sampling procedure

During the interview, there was some amount of non co-operation from a

section of the respondents, which were unavoidable. Hesitation and refusal of

the respondents caused one of the major limitations.

The lack of experience of the researcher in the field may become another

limiting factor.

Lack of time and resource constraint has also limited the scope to conduct the

survey smoothly and so as to prepare the report.


CHAPTER 2

ORGANIZATIONAL OVERVIEW

2.1 HISTORICAL BANKGROUND OF THE CITY BANK LIMITED

The City Bank Limited (CBL) is the first private sector bank in Bangladesh. The bank

has been operating since 1983 with an authorized capital of Tk.1.75 billon. The noble

intention behind starting this bank was to bring about qualitative changes in the sphere

of Banking and Financial Management. Today the City Bank serves its customers at

home and abroad with 83 branches spread over the country and about three hundred

oversea correspondences covering the entire major cities and business center of the

world. The services encompass wide diversified areas of trade, commerce and industry

which tailored to the specific need of customers and are distinguished by an exceptional

level of prompt and personal attention. Over the years the bank has expanded the

spectrums of its services. The extensive and ever growing domestic network provides

and carries various products and services to the doorsteps of millions.

The CBL was incorporated as a public limited company with limited liability on the

14th March, 1983 and its formal inauguration was on March 27, 1983 under company

act, 1913 in Bangladesh with the primary objective to carry on all kinds of banking

business. Functioning as a conventional Bank in the country since 1983, it has been

able to consolidate its position in the banking sector. The bank has been able to

establish a solid presence with the customers and general public through its improved

services, value addition in the economy and increasing shareholders value. The bank is

listed with Dhaka Stock Exchange and Chittagong Stock Exchange.


2.2 MISSION, VISSION AND OBJECTIVE OF CBL

2.2.1 Mission of CBL

To contribute to the socioeconomic development of the country,

To attain highest level of customer satisfaction through extension of services by

dedicated and motivated team of professionals,

To maintain continuous growth of market share ensuring Quality,

To maximize bank’s profits by ensuring its steady growth,

To maintain the high moral and ethical standards,

To nurture an enabling environment where innovativeness and performance is

rewarded

2.2.2 Vision of CBL

“To be the leading bank in the country with best practices and highest social

commitment”

2.2.3 Objective

Despite extreme competition among banks operating in Bangladesh, both local and

international the City Bank Limited has made a remarkable progress practically in

every sphere of its functions. The activities of the CBL are very implicit and vast

comparing to that of other banks in the country today. The theme of the bank is “For

Relationship Banking”. The prime objectives of the CBL are to create a strong capital

base, to earn good profit and pay satisfactory dividend to honorable shareholders with

proper social commitments. To achieve the objectives the management is continuously

working for the improvement of bank’s assets quality by identifying potential

depositors and good borrowers. Because it believes “The line of excellence never

ends”. The strategic plans and business will be its strength in this very competitive

environment.


2.3 STRATEGIES OF CBL

CBL believes in the practice of Market-Oriented Strategic Planning, developing and

maintaining a viable fit between the organization’s objectives, skills and resources. The

aim of such approach is to shape and reshape the bank’s businesses and services so that

they yield target profits and growth. The strategic planning of CBL consists of two

organizational levels, which are

Location Based Strategy

Business Level Strategy

2.3.1 Location Based Strategy

Since the growth and profits of banking business largely depend upon the locations of

branches where large concentration of other businesses and industries are involved,

CBL Main Strength is its location based strategy. The 84 branches of CBL are divided

into five different regions, which are

1. Dhaka Division comprises 37 branches.

2. Chittagong Division, comprising 15 branches.

3. Comilla Division, comprising 05 branches.

4. Sylhet Division, comprising 09 branches

5. Bogra Division, comprising 10 branches

6. Khulna Division, comprising 07 branches

The concentration of businesses and lifestyles of the people are not the same in these

five areas. So, the strategies of the five areas differ from one another; but they are

designed with distinctive local touch. Head office constantly monitors the progresses of

all the five areas. The bank is not interested in launching more branches. Currently

CBL is focusing in strengthening the existing branches.


2.3.2 Business Level Strategy

The business strategy of the Bank is to strengthen its retail business, following a

conservative lending approach. But the Bank’s major portion of the profit generates

from its Retail banking and SME Banking.

2.3.2.1 Retail Banking Strategy:

The City Bank Ltd. recently has started its journey in Retail Banking. More than 700

staffs have been trained so far on the vital concepts of service excellence and sales. In

the product side ATM fleet has been launched, Debit card and credit has been issued,

SMS Banking has been offered, 3 new deposit products have been introduced, manifold

in the endeavor to build a Retail Banking brand namely “City Retail Happiness

Counts”.

2.3.2.2 SME Banking Strategy:

Considering the potential growth and demand situation the City Bank Limited has

extended credit facilities to small and medium enterprises through SME Banking in the

year 2005 and 2006.A separate division has established in the Head Office with

collaboration of all branches to process and handle loans under SME for attaining a

respectable market share and successful operation of the scheme. The bank has

organized several training program for development of adequate human resources.

2.4 ORGANOGRAM OF CBL

CBL has moved from current geography to Business Matrix in the coming month. With

this end in view the Board of Directors in it’s meeting held on 29th July 2007 has

approved an interim restructured organogram and reporting lines for introduction in the

bank. The restructured organogram and the reporting lines are shown in the next page

The management of the bank strongly believes to achieve desired goals through these

changes. The changes would also result in much more value addition to the employees

of the bank.


Figure 1: Organizational structure of CBL


Shareholders

Board of Directors

Managing Directors

Deputy Managing Directors

Executive Committee

Company Secretary

Audit Committee Chief Advisor

HEAD OFFICE

Audit & Inspection Division

Central Accounts Division

Credit Division

Marketing, Development & General Banking Division

General Services Division

Human Resources Division

International Division

Information Technology Division

Research & Planning Division

Treasury & Money Market Division

Board Decretariat & Share Department

Cost Control Department

Law & Recovery Department

Card Cell

CHAPTER 3

FUNCTIONS AND BUSINESSES OF THE BANK

3.1 DESCRIPTION OF SERVICES OFFERED BY CBL

The services offered by CBL are discussed below

3.1.1 Services of CBL

The CBL concentrates the following categories of banking services-

General banking, Retail banking Loans and Advances,

-SME (Small & Medium Enterprises)-Corporate

International Trade and Foreign Exchange,-Export-Import-Remittance

Online Banking Services, Debit Card and Duel Currency Credit Card Facilities.

3.1.2 Retail Banking

One of the most remarkable success stories of last 50 years’ Banking Industry globally

has been the conceptualization and innovative execution of banking with individual

customers, their friends and families. The industry has termed it as Retail Banking or

Personal Banking or Consumer Banking. The City Bank Ltd. recently has started its

journey in Retail Banking. More than 800 staffs have been trained so far on the vital

concepts of service excellence and sales. In the product side ATM fleet has been

launched, Debit card has been issued, SMS Banking has been offered, 3 new deposit

products have come, workers’ foreign remittance business has been launched, new

many billboards have come up and our communications in media has increased,

manifold in the endeavor to build a Retail Banking brand namely “City Retail

Happiness Counts”.


3.1.3 SME Banking:

Considering the potential growth and demand situation the City Bank Limited has

extended credit facilities to small and medium enterprises through SME Banking in the

year 2006 and 2007.A separate division has established in the Head Office with

collaboration of all branches to process and handle loans under SME for attaining a

respectable market share and successful operation of the scheme. The bank has

organized several training program for development of adequate human resources.

3.1.4 Corporate and investment Banking

As part of its commitment to provide global quality service, the City Bank Ltd, one of

the largest local Banks, has launched its Corporate & Investment Banking Division

recently. This shift, from branch banking model to business driven matrix, is the first

step of the bank’s plan to revitalize its way of doing business in 2009. The C&I

Division will comprise of a number of relationship teams centered in Dhaka and

Chittagong to provide who will act as one stop contact point for the customers of the

bank. This model has been successfully globally to provide better service and create

increased customer satisfaction. The relationship teams have been staffed mainly

through internal quality resources. The C&I relationship teams have already taken over

the existing large accounts and servicing the customers to their satisfaction. The C&I

has also booked blue-chip customers like Grameen Phone, Epylion group, Banglalink,

Ericsson, Meghna Group, Esquire Group, Nandan etc. recently. Total new booking in

last few months is more than BDT 3,000 million. The C&I Division will also have

product teams i.e. structured finance, Islamic finance, leasing, cash management who

will meet the specialized product needs of the corporate customers. The time ahead is

going to be very challenging for C&I. The major challenges shall be to increase the

quality of the portfolio keeping in mind the business targets with timely formation and

support from other departments i.e. centralized credit administration, operations.

3.1.5 Duel Currency Credit Card

Today’s customer wants services and information to be provided at all times and

places. This has become possible by ATMs and POS terminals and helped banks in

achieving “Anytime, Anywhere Banking”. Therefore there is a need for an automated


system that will connect the branches through online to provide better services to the

customers. The most modern technology based bank product for making hassle free

financial transactions and drawing of cash money all over the world is given by Credit

Card. The City Bank Ltd is the first among domestic banks to introduce a unique dual

currency CITYCARD under the logo of VISA International in Bangladesh. After

obtaining principal membership of VISA on 19th February,2003 the bank is pleasing its

commitment to be a leader as card issuer in the arena. Tremendous responses are there

from the market for this plastic money. Up to March, 2010 the number of CITYCARD

is 20,215.

3.1.6 Computerization and Online Service

With computerization the bank had gone another step ahead towards providing

pragmatic, safe and prompt banking services. All 83 branches including Islamic

Banking Branch are brought under computerization net. Bank has implemented online

real time banking through an agreement with Info sys Technologies Limited for

supply of world reputed banking software “FINACLE”. Within March, 2010 real time

banking facilities have been introduced in 37 branches of the CBL. Under this system,

client will be able to do the following type of transactions:

o Easy to withdraw or deposit from any online branch

o Fund transfer with one click, no need TT/DD.

o Customer can easily tell which payments have cleared

3.1.7 Islamic Banking

The City Bank Limited started its Islamic Banking operation by opening its first

Islamic Banking Branch at 9/H, Motijheel, Dhaka. The salient features of Islamic

Banking are as follows:

To conduct all its activities as per Islamic Shariah.

To conduct its monetary matters free of interest.

To establish banker-customer relationship on the basis of partnership.

To follow Islamic principle in all its investment port-folio.

To develop living standard of the poor incoming group.

To render excellent services to the clients cordially.

To conduct welfare related activities to the people.


3.1.8 SWIFT Banking (SINCE 2000):

The City Bank Limited is one of the first few Bangladeshi Banks who has become

member of SWIFT (Society for Worldwide Inter-bank Financial Telecommunication)

in 1983. SWIFT is members owned co-operative, which provides a fast and accurate

communication network for financial transactions such as Letters of Credit, Fund

transfer etc. By becoming a member of SWIFT, the bank has opened up possibilities

for uninterrupted connectivity with over 5,700 user institutions in 150 countries around

the world.

3.1.9 Corporate Governance

The bank recognizes the importance of Corporate Governance and is committed to

maintain highest standard. A team of experienced professionals maintains the following

committees to run the Bank efficiently:

Management Committee

Administrative and Disciplinary Action Committee

Technical and Audit Committee

Credit committee

Procurement and purchase Committee

Asset and liability Committee

3.1.10 Training Program

The City Bank Ltd. has launched a huge training program for its staff as part of its

restructuring plan. So far, 774 staffs have received training on Customer Service and

face to Face Sales; 65 staff received training on Departmental operating Instructions

and 268 staff received training on Orientation to Credit. Apart from these regular

training are going on with BIBM, BIM, CRISL etc. City Bank Management gives top

priority to its peoples learning and development issues. That’s why the current training

project of City Bank is given a name “Learning & Development making the winning

Moves”.


3.2 FUNCTIONAL DIVISIONS OF CBL

The Bank accomplishes its functions through different functional divisions/

departments. The divisions/departments along with their major functions are listed

below:

3.2.1 Financial Division

Financial planning, budget prepartion and monitoring

Payment of salary

Controlling inter-branch transaction

Disbursement of bills

Preparation of financial reports and annual reports

Preparation/Review of returns and statements

Maintenance of Provident Fund, Gratuity, Superannuation Fund

Reconcilliation

3.2.2 Credit and risk management

Loan administration

Loan disbursement

Project evaluation

Processing and approving credit proposals of the branches

Documentation, CIB (Credit InformationBureau) report etc

Arranging different credit facilities

Providing related statements to the Bangladesh Bank and other departments

3.2.3 Human Resource Division (HRD)

Recruiting

Training and development

Compensation, employee benefit, leave and service rules program and upgration

Placement and performance appraisal of employees

Preparing related reports

Reporting to the Executive Committee/ Board on related matters

Promotional campaign and press release


3.2.4 Information Technology (IT) Department

Software development

Network management and expansion

Software and Hardware management

Member banks reconcilliation

Data entry and processing

Procurement of hardware and maintenance

3.2.5 Branches Control & Inspection Division

Controlling different functions of the branches and serch for location for expansion

Conducting internal audit and inspection both regularly and suddenly

Ensuring compliance with Bangladesh Bank (BB), monitoring BB’s inspection and

external audit reports

3.2.6 Retail Division

ATM card, Credit and system operation and maintenance

SWIFT operation

Credit Card Operation (Proposed)

Customer and vendor relationship

3.3 SWOT Analysis of The City Bank Limited


Every organization is composed of some internal strengths and weaknesses and also

has some external opportunities and threats in its whole life cycle. This following will

briefly introduce the customer to The City Bank Limited’s internal strengths and

weaknesses, and external opportunities and threats.

3.3 .1 Strengths

Stable source of fund

Strong Liquidity position

Concentrated market

Wide network of branches

Experienced top management

Diversified product line

3.3 .2 Weaknesses

Deposit is lower than advance.

Officer has limited experience and training

Small market share in Banking-business

Long-term credit is not sufficient

Relatively high overhead expanse

Problem in Delivery.

3.3 .3 Opportunities

Favorable regularity environment

Private sector development

Credit card business

SME and Agro based industry loan

Can increase the advertising of the Bank

3.3 .4 Threats


Deposit as well as quality assets

Market pressure for lowering the interest rate

Shrinkage in export, import and guarantee

Poor business due to economic slump and war

Frequency in Currency Devaluation

Emergence of Competitors

Govt. pressures to reduce interest rate

3.4 PERFORMANCE OF CBL FOR LAST TWO YEARS:

The City Bank Ltd., since its incorporation, continued to maintain its stable position in

the industry. The bank has been able to show a strong performance in business and

financial accounts. With better customer service, fulfillment of commitments to

corporate social responsibilities, ensuring sound corporate governance Bank

consolidated a solid presence with the customers and general public and in the industry.

During the last few years, significant improvement was evident in deposit mobilization,

advance portfolio augmentation and recovery of non-performing loan. Foreign trade, in

terms of import, export and inward foreign remittance have also shown noteworthy

growth in the year 2008. Last few years performances are described below-


******Sample*****

Figures in million


Sl.

ParticularsYear Under

Review ( 2008)

Year Under Review ( 2007)

1 Paid-up capital 1,366.20 1,188.00

2 Total capital 3,953.47 3,156.25

3 Capital surplus / (deficit) 361.58 652.55

4 Total assets 57,114.58 48,755.40

5 Total deposits 45,034.33 40,539.63

6 Total loans and advances / investments 34,420.94 26,788.47

7 Total contingent liabilities and commitments 10,920.87 8,277.64

8 Credit deposit ratio 76.43% 66.08%

9Percentage of classified loans / investments against total loans and advances / investments

6.30% 6.24%

10 Profit after tax and provision 398.11 343.46

11 Amount of classified loans / investments during current year 2,169.81 1,671.83

12 Provisions kept against classified loans / investments 779.80 462.78

13 Provision surplus/(deficit) against classified loans / investments 0.07 40.00

14 Cost of fund 6.90% 7.55%

15 Interest earning assets 49,196.70 42,757.28

16 Non-interest earning assets 7,917.88 5,998.12

17 Return on investment (ROI) 14.13% 12.33%

18 Return on assets (ROA) 0.75% 0.71%

19 Income from investment 1,171.67 860.27

20 Earnings per share (Taka) 29.14 25.14

21 Net income per share (Taka) 29.14 25.14

22 Price earning ratio (times) 15.49 28.85

3.4.1 Earning Per Share

Earnings stood at Tk. 29.14 per share in the year 2008 while it was Tk. 25.14 in the

preceding year.

3.4.2 Deposit

Banks deposit rise by 11.087 percent in 2008. Total deposit stood at Tk. 45,034.33

million with an increase of Tk. 4, 49,470 million. The deposit position in the year 2007

was Tk. 40,539.63 million.


3.4.3 Loans Advances

The portfolio of loans and advances at end of the year 2008 stood at Tk. 34,420.94

million with an increase of Tk. 7,63,247 million rise was 28.49 percent. The

outstanding amount at the same period of previous year was Tk. 26,788.47 million.

3.4.4 Foreign Remittance

The City Bank Ltd. Made new arrangements and fruitful strategies with money

exchange company in United Kingdom, Middle East and United States. In 2004 they

earn Tk. 2466 million but in 2005 there is dramatically increase Tk. 4158. Total amount

of foreign remittance through exchange houses and banks was BDT 8473 million. But

due to the economic slowdown in the year 2007 this bank earns Tk. 4932 million. And

lastly, foreign remittance in 2008 increase rapidly and it was Tk. 8579 million.

Chart 1: Foreign Remittance

3.4.5 Investment Operation

Bank was involved in utilization of surplus funds through investment in treasury bills,

bonds, government approved securities, debentures shares and money at call and short

notice. Investment in government securities like treasury bills and treasury bonds was

Tk. 2945 million and Tk. 2707 million respectively. Increases in these heads were Tk.

642 million and Tk. 2036 million respectively. Investment in private sector share,

debenture, and bond increased by Tk. 86 million and stood at Tk. 531 million as at 31 st

December, 2008. Growth under this head was 19 percent.


3.4.6 Capital Market Services

In an effort to promote industrialization and economic development of Bangladesh,

City Bank considered it appropriate to seize this opportunity by playing its due role in

capital market related activities. Accordingly the bank obtained Membership of Dhaka

Stock Exchange (DSE) for operating a brokerage house. To provide infrastructural

facilities for Local & Nonresident Bangladeshi (NRB) Investors through this brokerage

house and all other capital market related activities, a new Division namely ‘Capital

Market Services Division’ has been created and a Consultant with proper background

has been appointed.

3.5 FUTURE DIRECTIONS OF CBL

Due to good poet flood harvest recovery of agricultural output, stable manufacturing

growth supported by strong export demand of knit garments, robust service sector

growth and steady flows of inward remittances. Due to high international prices of

many other commodities like oil, gold etc. interest rate is on rising trend in global

economy with associate increase in the inflationary expectation. Bangladesh Bank is

alert to contain the inflationary pressure and tightened monetary measures are expected

to continue for facilitating smooth credit flow to productive pursuits only for targeted

output growth. The rate of interest of the country has already shown a changing trend in

both deposit and advance due to the tightened monetary measurers.

CBL is well positioned to meet the challenges of 2010 and will continue to strive to

innovate and capture for modest growth, value creation and quality improvement. The

Bank will focus on its existing customers and potential customers also. This strategy is

supported by wide spectrum of product and services and level of customer service

delivery. The Bank will continue to harness the potential of retail banking, SMS

banking and remittance market. How ever, there are continued pressure on interest

margins, commission and fee earnings, exchange income and increased provision

requirement for retail. In its pursuit for growth, CBL will always adhere to good

corporate governance and best practices and sound risk management policies and strict

credit evaluation procedure.


CHAPTER 4

AN INTRODUCTION TO CBL CREDIT CARD

4.1 WHAT IS A CREDIT CARD?

Credit Card is an electronic based plastic card bearing an account number assigned to a

cardholder with a credit limit that can be used to purchase goods and pay for services

with a credit facility and without cash/currency note transactions from the appointed

merchants of issuer of the card and to obtain cash disbursements on credit, for which

the card holder is subsequently billed by an issuer for repayment of credit extended at

once or on an installment basis.

4.2 OVERVIEW OF THE CITY BANK CREDIT CARD

The City Bank Limited (CBL) launched Visa Credit Card business back in April 14,

2004. Presently it has only 20,215 cards in market whereas other contemporary

competitors have grabbed a remarkable market share. Lack of dynamic product

features, proper marketing effort, structured credit process, supervision of delinquency

etc. is behind this miserable situation. Hence, The City Bank Limited is planning to re-

launch its City Card shortly with all dynamic features, proper marketing strategy,

smooth distribution channels (Direct Sales Team), structured collection team and above

all with a best Credit Process for Cards Division.

4.2.1 Target Market

The name list of the target Market includes:

Salaried

Self Employed (Professionals & Businessman)

FCY A/C holders (Dual Currency Card)

ERQ account holders (Dual Currency)

Housewives/Students (for Secured Card/Supplementary Card)

Other legitimate income earners like land lord and land lady


4.2.2 Non Target Customer

Followings are the non target segment of CBL Credit Card

Journalist of reasonably lower level & non reputed publications

Lawyers

Politicians & Individuals having politically affinity

Travel agents and C & F agents of lower level

Defense officials below Major level

Employees of un reputed sole proprietorship company

Employees of Negative listed companies

Individuals who are enlisted in CBL/other banks’ negative list

4.2.3 Eligibility of Customers

Bangladeshi Nationals

Age range for primary card holder is 18 years to 60 years

Age range for supplementary card holder is 18 year to 60 years

Age bar can be relaxed for secured cards

Minimum Gross Monthly Income(GMI) for silver card Tk 12,000

Minimum Gross Monthly Income(GMI) for gold card Tk 30,000

Minimum 6 month permanent employment for salaried executives (this indicates

total length of service as a total of all companies he or she has worked for), and 1

year of experience in business or practice for self employed professionals and

business person.

4.2.4 Income & Identification Document

Photograph and business card

Photo ID/ Driving license/ Copy of Passport for international card

Bank Statement for last 6 months (3 months for agreed corporate deals)

TIN related document


Letter of Introduction (LOI) from applicant’s employer or salary certificate or pay

slip along with major information like joining date, job status and salary break up

For business person copy of Trade license/Memorandum of Articles/Memorandum

of Association.

Credit Card Application flow Chart

Figure 2: Credit Card application flow chart


Approved

Branch/Walk in/ CSA

Customer

Direct sales

Reviewed By Credit

CS of Branch/Cards/

Courier

Tele sales/ Corporate

Card OpsCheck and Card

Production

Reviewed By Sales/Branch

Credit Analyst

Declined

Credit /RFC (MIS)

Archive of all files

Manager/Senior Manager /Head of Retail Finance

CPV Agents

Approved /Declined or Send Back to

Source

CHAPTER 5

ANALYSIS AND FINDINGS OF THE STUDY

There are two major parts of the analysis, which are

Issuers

Cardholders

5.1 DEMOGRAPHIC PROFILE OF THE CREDIT CARDHOLDERS

5.1.1 Sex and Marital Status

Most of the respondents were male and the male female ratio was 83:17%; and, 65% of

them were married and the rest 35% were single (Table 1).

SexMarital Status

Single Married Totalf % f % f %

Male 39 32 62 51 101 83Female 4 3 17 14 21 17Total 43 35 79 65 122 100

Table 1: Distribution of sex and marital status of the cardholders

5.1.2 Age and Income

The group with the maximum frequency was of age group of 26-35 belonging to the

income level of Tk.25000-39000 (Table 2).

Income LevelAge Group

25 or less 26-35 36-45 46-55 56 & above Totalf % f % f % f % f % f %

Tk 10000-24000 12 10 15 12 3 2 - - - - 30 25Tk 25000-39000 - - 28 23 7 6 - - - - 35 29Tk 40000-54000 - - 6 5 5 4 10 8 2 2 23 19Tk 55000-69000 - - - - 10 8 6 5 3 2 19 16Tk 70000-84000 - - - - 2 2 4 3 2 2 8 7Tk 85000 & above - - - - 1 1 3 2 3 2 7 6Total 12 10 49 40 28 23 23 19 10 8 122 100

Table 2: Distribution of income level and age group of the cardholders

5.1.3 Education and Occupation


The highest cell in this cross table is the banker having MBA degree under their belt

(Table 3).

OccupationEducation

Graduate BBA Post Graduate MBA Others Totalf % f % f % f % f % f %

Businessman 4 3 - - 5 4 2 2 - - 11 9Banker 9 7 9 7 16 13 12 10 - - 46 38Service Holder (Pvt.) 3 2 11 9 13 11 10 8 2 2 39 32Professional 5 4 - 6 5 3 2 - - 14 11Teacher - - - - 2 2 4 3 - - 6 5Others - - - - 3 2 3 2 - - 6 5

Total 21 17 20 16 45 37 34 28 2 2 122 100

Table 3: Distribution of education and occupation of the cardholders

5.2 ISSUERS

This section includes market share analysis, merchant coverage, service offerings and pricing

/charges & fees of different cards of different issuers.

5.2.1 Service Offerings

All the service offerings of different issuers are listed at the following page in Table 4. The

following are the highlights of them.

Facility CBL BAL DBBL EBL

Avg. Card Processing

& Delivery Time5 Days 5 Days 5 Days 2 Days

Avg. Fund Disbursement

Time2 Day 2 Days 3 Days 3 Days

Grace Period 50 Days 45 Days 45 Days 45 Days

Payment Due Date From

Statement Date20 Days 15 Days 15 Days 15 Days

Cash Withdrawal/

Advance Facility

Available (50% of

credit limit)

Available

(40%)

Available

(50%)

Available

(50%)

ATM Facility 28 16 234 37

Table 4: Service offerings/facilities of different issuers’ cards


I. Card Processing & Delivery Time

The average time for processing the card and delivery is 5 Days for CBL. EBL takes only 2

days for processing the card and delivery.

II. Grace Period/Interest Free Period

CBL is enjoying a competitive edge by providing the maximum grace period of 50 days,

comparing to 45 days provided by the other issuers.

III. Payment Due Date From Statement Date

CBL is also the provider of the maximum time in the market for payment due date from

statement date with 20 days comparing to the same of 15 days provided by the other issuers.

IV. Cash Withdrawal

All the issuers provide cash advance facility of 50% of the credit limit, except Bank Asia ,

which provides only 40% of the same.

V. ATM Facility

Cash advance facility has a close relation with ATM (Automated Teller Machine) facility for

credit card, which is very convenient for the cardholders to draw cash from ATM rather than

going to the bank. Here DBBL is in a leading position with 234 ATM booths all around the

country. Currently CBL has come to an agreement with DBBL to Share their ATM facility

VI. Fund Disbursement Time

The average time for the disbursement of fund (through cheque or pay order) to the merchants

is 2 day of CBL, 1-2 day(s) of BAL, and 3 days of DBBL and EBL. Being aware of the

importance of this matter, CBL is now trying to provide the fastest service in the market.

5.2.2 Charges & Fees & Attractive Features of Different Issuers


The schedule of different charges and fees of various cards of different issuers are

given in the next two pages in Table 5 (local) The focus of this study is primarily on the

local cardholders; so, the best offers in cases of all the local charges are listed below:

The Lowest annual fee for Basic card local classic is Tk. 1000 (offered by CBL,

DBBL & EBL) and local gold is Tk 1500 (offered by DBBL).

The Lowest annual fee for supplementary card local gold is Tk. 750 (offered by

CBL) and local gold is Tk 500 (offered by CBL).

No renewal charge for Basic & Supplementary Card this feature is provided by

EBL

Late payment fee for local gold is Tk. 300 (offered by CBL) and local gold is Tk

200 (offered by CBL& DBBL) which is low comparing to other banks.

The lowest return cheque fee is Tk. 100 both for local gold and classic offered by

CBL.

The sales slip retrieval fee is Tk. 100 both for local gold and classic offered by

CBL

The monthly interest rate of NBL is lowest with 2% comparing to 3% of others.


Table 5: Schedule of charges of different issuers’ local cards

Fees & Charges

The City Bank

Ltd Bank Asia DBBL Eastern Bank

Gold

Classi

c Gold

Classi

c Gold Classic Gold

Classi

c

Annual Fee Basic Card 2000 1000 2000 1000 1500 1000 2500 1300

Annual Fee

Supplementary Card 750 500 1500 1000 2000 1000 2500 1300

Renewal Fee Basic Card 2000 1000 2000 1000 1900 1000 0* 0*

Renewal Fee

Supplementary Card 750 500 1000 500 900 600 0* 0*

Replacement Card Fee 400 200 500 500 700 500 300 150

Late Payment Penalty 300 200 500 250 350 200 500 300

EOL Charge 500 200 500 300 400 300 nil nil

Pin Re-issue Fee 500 500 500 500 200 200 300 150

Cash Advance Fee

2%

or

TK75

2% or

TK75

2% or

TK

150

2% or

TK

150

2% or

TK

100

2% or

TK 100

3% or

TK100

3% or

TK100

Return Cheque Fee 100 100 350 250 350 250 200 200

Statement Retrieval Fee 50 50 50 50 50 50 50 50

Sales Slip Retrieval Fee 100 100 250 200 250 200 200 200

Out Station Cheque Collection Fee

100 100 100 100 100 100 250 250

Cash Advance Limit 50% 50% 50% 50% 50% 50% 50% 50%

Cash Advance Interest

2%

P/M

2%

P/M

2.5%

P/M

2.5%

P/M

2.5%

P/M

2.5%

P/M

2.5%

P/M

2.5%

P/M

Debit Interest

2.5%

P/M

2.5%

P/M

2.5%

P/M

2.5%

P/M

2.5%

P/M

2.5%

P/M

2.5%

P/M

2.5%

P/M

Advance Income Tax NIL NIL 3% 3% - - - -

Minimum Payment 5% 5% 5% 5% 5% 5%

5% or

500 H

5% or

500 H

Special Features NILSpouse Card

FreeNil

*No renewal charge

for Basic

& Supplementary

Card


5.3 CARDHOLDERS’ RESPONSES

This section focuses on analyzing cardholders’ responses regarding their, card usage

pattern, credit card transaction habit, purposes of card transaction and satisfaction level

of the services of a particular banks etc.

5.3.1 Usage Pattern

I. Transaction pattern

The highest number of respondents, 41 – comprising 33.6% of them, said that they use

their cards once a week (Table 6). The second highest 28.7% use their cards once in

every 15 days. And, it was found that almost 70% of the respondents use their credit

cards once in every 15 days or more frequently.

Response f % Cumulative %

More than once a week 9 7.4 7.4

Once a week 41 33.6 41.0

Once in every 15 days 35 28.7 69.7

Once a month 23 18.9 88.5

Once in every 2 months 14 11.5 100.0

Total 122 100.0

Table 6: Frequency of credit card transaction by the cardholders


II. Monthly Average Credit Card Transaction Amount

On an average, 36% of the respondents spend less than Tk 5000 but not less than Tk

2000 monthly (Table 7). Another 22% respondents spend more than Tk 5000 but less

than Tk 10000. And, a little more than 50% of the respondents spend Tk 5000 or more

(Figure 2.10).

Amount f % Cumulative %

Less than Tk 2000 16 13.1 100.0

Tk 2000 – 4999 44 36.1 86.9

Tk 5000 – 9999 27 22.1 50.8

Tk 10000 – 19999 22 18.0 28.7

Tk 20000 or more 13 10.7 10.7

Total 122 100

Table 7: Average monthly credit card transaction amount of the cardholders

Chart 2: Average monthly credit card transaction amount of the

cardholders


III. Usage of multiple cards

An astonishing 67.2% of the respondents use multiple (more than one) credit cards as it

is shown in Table 2.5. The other 32.8% use single card and significantly to say that

most of them are relatively new users of credit cards. The most important reason for

that is to get the chance of buying from the maximum number of merchants (Figure 8

So, it would be a competitive advantage for CBL if it appoints new merchants, who are

not the merchants of other issuers.

Type f %

Single card user 40 32.8

Multiple card user 82 67.2

Total 122 100

Table 8: Cardholders according to single/multiple card user

Chart 3: Cardholders according to single/multiple card user

5.3.2 Specific Satisfaction Level

This section seeks to rank different issuers according to CPA on specific issues like

cash withdrawal, discount, customer service, merchant coverage, grace period and fees

etc.


I. Cash Withdrawal Facility

The cash withdrawal facility of BAL is 10% of available credit limit, so their

cardholders are not much satisfied with that as it is obvious from Table 9. CBL is

sharing a strong position with DBBL

Issuer

Very

Satisfied (5)

Satisfied

(4)

Indifferent

(3)Dissatisfied (2)

Very Dis-

satisfied (1) Total

Points

# of

resCPA

f w f w f w f w f w

CBL 29 145 47 188 8 24 357 84 4.25

DBBL 2 10 7 28 3 9 47 12 3.92

EBL 7 28 3 9 37 10 3.70

BAL 1 5 5 20 5 15 3 6 1 1 47 15 3.13

Table 9: Satisfaction level regarding cash withdrawal facility

II. Discount Facility

Regarding discount facility, none of the issuers is at a very comfortable position. So it is an

area where CBL can exploit in the credit card business by convincing merchants to offer

attractive discount facility to the cardholders. And to do so merchants should be compensated

or well backed up by the Bank.

IssuerVery

Satisfied (5)Satisfied

(4)Indifferent

(3)Dissatisfied (2)

Very Dis-satisfied (1)

TotalPoints

# Of Res. CPA

f w f w f w f w f wCBL 9 45 46 184 21 63 8 16 308 84 3.67

BAL 2 10 7 28 4 12 2 4 54 15 3.60

DBBL 1 5 5 20 4 12 2 4 41 12 3.42

EBL 5 20 3 9 2 4 33 10 3.30

Table 10: Satisfaction level regarding discount facility

III. Interest Charges & Fees


As it is very clear from the following table (Table 11) that none of the issuers’ position

in this regard is very good at all. So, CBL should focus its plan on this aspect. If the

Bank would be able to offer the same service with lesser than the present issuers, it will

be able to convince a lot of existing cardholders as well as prospective new

cardholders.

Issuer

Very

Satisfied (5)

Satisfied

(4)

Indifferent

(3)

Dissatisfied

(2)

Very Dis-

satisfied (1) Total

Points

# Of

Res. CPA

f w f w f w f w f w

DBBL 3 12 3 9 5 10 1 1 32 12 2.67

BAL 2 8 4 12 7 14 2 2 36 15 2.40

EBL 1 4 3 9 5 10 1 1 24 10 2.40

CBL 11 44 25 75 29 58 19 19 196 84 2.33

Table 11: Satisfaction level regarding interest charges & fees

IV. Grace Period

The grace period or interest free period for repayment that CBL is 50 days as compared

to 45 days of other issuers. The outcome of that difference becomes truly vivid in the

following table (Table 12), as only DBBL has a CPA above 4.0 and the same is around

3.0 of other issuers. So, if CBL could just follow DBBL’s strategy here it will be an

advantage for the bank at least against the other issuers.

Issuer

Very

Satisfied (5)

Satisfied

(4)

Indifferent

(3)

Dissatisfied

(2)

Very Dis-

satisfied (1) Total

Points

# Of

Res. CPA

f w f w f w f w f w

DBBL 4 20 6 24 2 6 50 12 4.17

CBL 33 132 28 84 14 28 9 9 253 84 3.01

EBL 5 20 2 6 1 2 1 1 29 10 2.90

BAL 3 12 5 15 6 12 1 1 40 15 2.67

Table 12: Satisfaction level regarding grace period

V. Customer Service


Although EBL is one of the earliest of issuers of credit card, the customer service of

EBL is not very good as it is depicted in the following table (Table 13). It could be a

determining factor for the slow growth rate in credit card business of that bank. So,

CBL should be concerned in this regard.

IssuerVery


(4)Indifferent

(3)Dissatisfied (2)

Very Dis-satisfied (1) Total

Points

# Of Res. CPA

f w f w f w f w f w

CBL 18 90 36 180 30 90 360 84 4.29

BAL 2 10 6 24 7 21 55 15 3.67

DBBL 5 20 6 18 1 3 41 12 3.42

EBL 1 4 2 6 4 8 3 3 21 10 2.10

Table 13: Satisfaction level regarding customer services

VI. ATM facility

DBBL is in a leading position with 234 ATM booths all around the country. The

reflection of that can be seen in the following table where DBBL has a CPA above

4. .Currently CBL has come to an agreement with DBBL to Share their ATM facility.

Issuer

Very

Satisfied (5)

Satisfied

(4)

Indifferent

(3)Dissatisfied (2)

Very Dis-

satisfied (1) Total

Points

# Of

Res. CPA

f w f w f w f w f w

DBBL 4 20 6 24 2 6 50 12 4.17

CBL 33 132 28 84 14 28 9 9 253 84 3.01

EBL 5 20 2 6 1 2 1 1 29 10 2.90

BAL 3 12 5 15 6 12 1 1 40 15 2.67

Table14: satisfaction regarding ATM facility

5.3.3 Overall Satisfaction Level

The highest satisfaction level of the cardholders regarding the overall service including

all aspects of credit card operation is of CBl, which secured 4.13 CPA (Cumulative

Point Average, see Appendix C) as shown in Table 15 and Figure 6. The second in this

category is DBBL with CPA of 4.08. The satisfaction level of the cardholders of BAL

is below satisfied level (4), with 3.80 CPA and that of EBL is very low at 3.2 CPA.

IssuerVery


(4)Indifferent

(3)Dissatisfied (2)

Very Dis-satisfied (1) Total

Points

# Of Res. CPA

f w f w F w f w f


CBL 17 85 61 244 6 18 --- 347 84 4.13

BAL 2 10 11 44 1 3 1 2 --- 57 15 3.80

DBBL 2 10 9 36 1 3 --- 49 12 4.08

EBL 6 24 2 6 2 4 --- 32 10 3.2

Table 15: Overall satisfaction level of the cardholders of different issuers

Chart 4: Overall satisfaction level (CPA) of the cardholders of different issuers

Chapter 6


Logistic and Support Division

6.0.0 Purchase and Procurement Policy

To bring uniformity & transparency in the purchase & procurement process of The City

Bank Limited, the Board advised to formulate the purchase policy. Considerations of

Economy, Efficiency & Quality were the basis underlying this policy. The salient

features of the policy are: Common Services Division (presently named as Logistic and

Support Division) to be responsible for all types of purchase & procurement of the

bank.

a. Purchase beyond Tk.3.00 (three) lacks is made through publication of the tender

in at least one widely circulated national daily. All purchase should be made at

competitive rate.( There fore more participation is appreciated)

b. In line with the guidelines of BRPD circular No.16 of 24 July 2003 purchase of

vehicle be made as and when required through Board’s approval and renovation

and decoration with the approval of Board/EC

c. In all such cases guidelines of above BRPD circular are meticulously followed.

A) The policy is divided into four categories as follows:

1. Renovation & Decoration Policy.

2. Vehicles purchase policy.

3. Printing policy.

4. General (All types of purchase excluding serial No. 1, 2, & 3).

(B) General rules:

All units of the bank to send requisition to Logistic and Support

(L&SD) .The Division to start the process of purchase after assessing the

needs as per defined criteria.

A purchase & procurement Committee (PPC) to be formed with not less

than 4 members under MD’s discretion. This committee will supervise the

procurement process for all purchases above Tk.25,000/-. As for purchase

up to Tk.25,000/- approval will be given as per financial delegation

approved by the Board.


The whole process of purchase (from requisition to delivery) should be

completed within a reasonable period of time. Logistic and Support

Division to ensure prompt response & delivery of the requisitioned items

subject to external factors.

6.1 Renovation/Decoration work Policy:

6.1.01 For preparing lay-out reputed Designers/Decorators to be invited. For preparing

lay- out plan and supervision of the work order maximum 4%* of work order

value may be paid as remuneration fee.

* (1.08 % within Dhaka and 1.50 % Outside Dhaka are currently applied)

6.1.02 Tender schedule to be issued to the established companies/firms which has

work experience with The City Bank Limited or with the other reputed

organizations. Tender may be accepted subject to participation of minimum 3

bidders. (Can we go for open tender in the newspapers instead..?)

6.1.03 Tender to be opened & signed by members of PPC in presence of the bidders.

6.1.04 Note to be placed before the management for approval by preparing

comparative statement of quotations with the recommendation of purchase &

procurement committee. As per decision of the competent authority, work order

may be issued.

6.1.05 Apart from price, the committee to consider supplier’s previous experience &

goodwill for awarding work order.

6.1.06 At the time of final payment, 10% to be retained from the work order amount

as security money for 3(three) months.

6.1.07 The work order to specify completion time and penalty charge (in case of

failure to complete the work within the stipulated time).


6.2 Vehicle Purchase Policy:

6.2.01 Vehicle may be allotted to branches on the basis of a defined criteria and

management discretion.

6.2.02 Vehicles may be purchased for a new employee or promoted employee as per

service rule. In addition, vehicles may also be purchased as a replacement for

disposed off vehicles as per management decision.

6.2.03 Straight line basis to be followed for depreciation & 20% to be charged on

purchase value. Book value to be Tk.1/- after 5(five) years. Decision for sale of

Vehicles may be taken where expenditure for repairs is on the high side.

6.2.04 Competent authorities to take decision regarding the type & numbers of

vehicles to be purchased after taking into account the need, allotment criteria,

availability as well as brand, model, year of manufacture, capacity i.e. CC etc.

(Can we specify some brands considering the resale value otherwise it may incur

huge loss at the time of dispose off these vehicles?)

6.2.05 Spare parts availability, maintenance, cost of repairing, re-sale value of

vehicle & cost of fuel consumption to be due consideration.

6.2.06 Minimum 3 quotations to be collected from reputed supplier/firms, competent

authority to negotiate for a better price or terms & condition while implementing

the decision of the Board/Executive Committee/Management based on

competitive quotations & lowest price.

(Lowest price also should be considered along with its resale value and

availability of spare parts)

6.2.07 Satisfactory pre-delivery inspection report and performance certificate from a

reputed firm to be a pre-condition for taking delivery of vehicles.

6.3 Printing Policy:


6.3.01 Printing to be undertaken for new items and for replenishing stock of existing

items. Process for printing to be initiated much before depletion of current stock.

6.3.02 Sealed quotations to be invited subject to approval of sample items by the Head

Office Printing Advisory Committee (PAC) as is functioning.

6.3.03 Sealed quotations to be opened in presence of PAC and bidders (if any), at the

prescribed schedule for on ward submission to PPC with its recommendation.

6.3.04 PPC to evaluate the quotations by giving due consideration to price, paper

quality etc. and work order may then be issued obtaining approval from

appropriate authority.

6.3.05 At the time of issuing work order 5 to 10% of quoted value as deducted by the

competent authority to be kept as security money & to be refunded at the time of

final payment of the bill, subject to satisfactory completion of the printing work.

(There can be a clause of penalty if the products are subsequently found

substandard)

6.3.06 In case of any negligence or delay on the part of printing

institution/vender/supplier, provision for penalty as decided by the competent

authority to be included in the work order.

6.4.00 General:

This would include purchase/procurement of all items except renovation/decoration

work, vehicles & printing. Procedures included under General rules would apply for

any purchase/procurement under this category. Moreover management may delegate

power to Zonal office/branch to make small purchases required urgently.


CHAPTER 7

FINDINGS, CONCLUSION AND RECOMMENDATION

7.1 FINDINGS


By analyzing the services offering and charges of CBL regarding Credit

cards comparing with other banks. CBL has the maximum grace period.

CBL is also the provider of the maximum time in the market for payment

due date from statement date with 20 days comparing to the same of 15 days

provided by the other issuers.

DBBL is in a leading position with 534 ATM booths all around the country. Currently

CBL has come to an agreement with DBBL to Share their ATM facility.

The average time for the disbursement of fund (through cheque or pay order) to the

merchants is 2 day of CBL, 1-2 day(s) of BAL, and 3 days of DBBL and EBL. Being

aware of the importance of this matter, CBL is now trying to provide the fastest service

in the market.

Late payment fee for local gold is Tk. 300 (offered by CBL) and local gold is

Tk 200 (offered by CBL& DBBL) which is low comparing to other banks.

The lowest return cheque fee is Tk. 100 both for local gold and classic offered

by CBL.

The Lowest annual fee for supplementary card local gold is Tk. 750 (offered by

CBL) and local gold is Tk 500 (offered by CBL).

7.2 CONCLUSION

In this age of modern civilization bank is playing its splendid role to keep to the

economic development wheel moving. We can see lot of new commercial banks


has been established in last few years and these banks have made this banking

sector very competitive. The major task for banks, to survive in this competitive

environment is by managing its assets and liabilities in an efficient way. The

overall success in credit management depends on the customer satisfaction.

From the analyses and findings of the study, it is obvious that there is a lot of

market potential for CBL in the Credit Card Business and some areas of

improvement are there also comparing to the existing issuers in the market. CBL

having basic infrastructure and a larger client base this is the high time for the

bank to enter into the business. Initially, it will require a huge investment, but

the bank is financially sound to incur such amount of investment in new line of

business. It is expected that Bangladesh will experience a heavy inflow of

foreign companies investing in various sectors especially in IT and Gas and Oil

Exploration and processing. This will give birth to various ancillary industries

and services, which will ultimately increase the purchasing power of people.

This factor enhances the chance of an up coming growing population of the

community who wants convenience of not carrying cash and the use credit card

is the easiest way of doing so.

7.3 RECOMMENDATION

The specific and broad recommendations of the study are as follows:


Train employees to provide better service to the card holders and form a strong

sales force to sale its credit card

The card delivery time should not be more than a week. But it should not be less

than 5 days. Because the possibility of incorrect assessment of the

creditworthiness of the applicants would be very high then.

ATM facility is an advantage for the bank to provide ATM facility to its

cardholders. CBL should increase the number of its ATM booths

In case of determining the charges and fees the bank should follow the least

price strategy, at least initially, while entering the market, to attract the

customers. The charges may be gradually increased while staying competitive

in the market.

The bonus point system can be followed. Waiver on interest charges and/or

renewal charges will strike into minds of the cardholders and they will be more

satisfied and encouraged to do more and more card transaction.

Customers should be offered occasional gifts and discounts, which can make

the credit card more attractive and keep the consumer delighted.

Regular customer survey could also be conducted with an aim to find out the

customer's expectations or to know about their satisfaction on bank's

performance.

Finally, heavy marketing and promotional campaign should be conducted to

popularize the product and make people aware of the service.

BIBLIOGRAPHY

TEXTBOOKS


R.D. Mason, W.G. Marchal & Douglas A. Lind, Statistical techniques in Business &

Economics, 11th edition, 2002

Murray R. Spiegel & Larry J.Stephens, Theory and Problems of Statistics, 3rd Edition,

McGraw-Hill, 1999.

OTHER PUBLICATIONS

Brochures and publications of CBL products

Annual report of the year 2008 of CBL

Credit Card Brochures and pricing guides of different issuers

WEBSITES (URLS)

Some websites are visited for collecting some secondary data, which are:

http://www.thecitybank .com/

http://www.visa.com/

http://www.ebl.com

http://www.bankasia.com

http://www.dbbl.info

FORMULAS AND CALCULATION

Table 16: Weight assigned to various scales for CPA analysis

I. ISSUERS

QQUESTIONNAIREUESTIONNAIRE


5-Point ScaleWeight Priority Scale

Satisfaction Level Scale5 1st Priority Very Satisfied

4 2nd Priority Satisfied

3 3rd Priority Indifferent

2 4th Priority Dissatisfied

1 5th Priority Very Dissatisfied

Dear Respondent, I am a student of Department of Business Administration,

Patuakhali Science and Technology University. I am going to conduct a

comparative analysis on The City Bank Ltd. credit card. This study is only

for use of my academic purpose and the provided information will be

treated confidentially. Thank you in advance for your kind cooperation.

Please read the questions carefully and just put a tick ( √ ) in the respective box ( □ ) and kindly

give your judgments where necessary.

1. What types of credit cards do you offer?

2. Do you offer free supplementary/spouse card?

□ Yes □ No

3. What are the credit limits of your various cards?

…………………………………………………

4. What is the average processing & delivery time of your cards? ………….Days

5. Do you provide cash withdrawal facilities to the cardholders?

□ Yes □ No

6. How many ATM booths does u have all over the country?

. . . . . . . . . . . . . . . . . . . .. . . . . . . .

7. Do you provide payment of utility facilities to the cardholders?

□ Yes □ No

8. Do you provide interest free period/grace period facilities to the cardholders?

□ Yes □ No

9. If yes, then……….. (Days)

10. What is your average fund disbursement fund disbursement time…………days.

11. What is the time for payment due date form statement date………..daysA Comparative Analysis on Credit Card: Fees, Charges, Documentation and Customer

satisfaction of The City Bank Ltd. of 54

12. Please mention the fees and charges of your bank in the following table

Fees & Charges for local currency

Gold Classic

Annual Fee Basic Card

Annual Fee Supplementary Card

Renewal Fee Basic Card

Renewal Fee Supplementary Card

Replacement Card Fee

Late Payment Penalty

EOL Charge

Pin Re-issue Fee

Cash Advance Fee

Return Cheque Fee

Statement Retrieval Fee

Sales Slip Retrieval Fee

Out Station Cheque Collection Fee

Cash Advance Limit

Cash Advance Interest

Debit Interest

Advance Income Tax

Minimum Payment

THANK YOU

II. CARDHOLDERS

QQUESTIONNAIREUESTIONNAIRE


Dear Respondent, I am a student of Department of Business Administration,

Patuakhali Science and Technology University. I am going to conduct a

comparative analysis on The City Bank Ltd. credit card. This study is only for use of

my academic purpose and the provided information will be treated confidentially.

Thank you in advance for your kind cooperation.

Please read the questions carefully and just put a tick ( √ ) in the respective box ( □ ) and kindly

give your judgments where necessary.

1. What is your credit limit? BDT/USD ……………………………

2. Are you satisfied with your credit limit?

□ Yes □ No

3. How frequently do you use your Credit Card?

□ More than once a week □ Once a week

□ Once in every 15 days □ Once a month

□ Once in every 2 months □ Other, please specify……………………

4. What is the average amount of your Credit Card transaction per month/year?

Monthly………………………… Or, Yearly…………………………..

5. If you use more than one card, please specify ………………………………

6. Why do you prefer to maintain more than one card? (Please specify)

□ To get the chance of buying from the maximum number of merchant locations

□ To strengthen the relationship with the issuing bank

□ To compare the services

□ To gain more prestige

□ given as office staff card

□ other reasons……………………………

7. What is the overall level of satisfaction regarding your Credit Card service?

□ Very Satisfied

□ Satisfied

□ Indifferent


□ Dissatisfied

□ Very Dissatisfied

8. How do the following attributes support your level of satisfaction?

Attribute

VERY

SATISFIE

D

SATISFIE

D

INDIF

FERENTDISSATISFIED

VERY

DISSATISFIED

Cash withdrawal facility

Discount facility

Payment of utility bills

Interest charges & fees

Grace period

Number of ATM Booths

Customer service

Merchant coverage

Demographic Part

Sex: □ Male □ Female

Marital Status: □ Single□ Married

Age Group: □ 25 or less □ 26 – 35 □ 36 – 45

□ 46 – 55 □ 56 – 65 □ 66 and above

Occupation: □ Business □ Professional □ Service Holder (Govt.)

□ Banker □ Teacher □ Service Holder (Pvt.)

□ Other…………………

Income Level (Monthly income in BDT):


□ 10,000 - 24,000 □ 25,000 - 39,000 □ 40,000 - 54,000

□ 55,000 - 69,000 □ 70,000 - 84,000 □ 85,000 & above

Education Level: □ HSC □ Graduate □ Post Graduate

□ BBA □ MBA □ Ph. D

THANK YOU


a comparative analysis on credit card: fees, charges, documentation and customer satisfaction of the...

Documents

credit card business

credit card service

credit card agreements

credit card facility

existing credit card

credit cards

city bank limited

charges of cbl