Professional Documents
Culture Documents
The organization attachment started on February 15, 2000 and finished on April 15,
2000. My organization supervisor Mr. Kamruzzaman Mamun (Credit Manager,
Personal Financial Services, Anchor Tower, HSBC) assigned me the topic of the term
paper & my institution supervisor at Asian University Mr. Sirker, duly approved it.
1.2 Purpose
The purposes of this report cognates the internship purpose. The internship objective is
to gather practical knowledge and experiencing the corporate working environment
with the close approximation to the business firm and the experts who are leading and
making strategic decisions to enhance the growth of a financial institution. To this
regard this report is contemplating the knowledge and experience accumulated from
internship program. With the set guidelines and proposal by the Asian University and
with the kind advices of the organization and the internship supervisor, this report
comprise of an organization part and a project part.
Give a very brief overview of the risk analysis criteria for loan assessment.
Analysis the demography of the skip customers.
Find out if there is any relationship among the skip customers.
1.3 Scope
The scope of this report is limited to the overall description of the company, its services
and its financial performance analysis. The scope of the study is limited to
organizational setup, functions, and performances Since HSBC is still in its growth
stage in Bangladesh; it has still to go a long way to achieve its destination. The report
will mainly focus on what criteria HSBC Bangladesh is maintaining before approving
the loan facility. And if there is relationship among the customers who are defaulting to
pay the installments accordingly.
1.4 Methodology
Both the primary as well as the secondary form of information was used to prepare the
report. The details of these sources are highlighted below.
Primary Sources:
Customer database and historical data of delinquent customers.
Interviews with the approval officers as well as the sales and collection
teams.
Secondary Sources:
Internal Sources
External Sources
Newspapers
Website information
Data collecting instruments:
In-depth interview
1.5 Limitations
One of the main barriers in writing this report was the confidentiality of data. Though I
had access to lot of information regarding the performance of the bank, I am unable and
not authorized to use this information due to legal restrictions.
Chapter 2: Introduction to HSBC Group
We aim to satisfy our customers with high quality service that reflects our global
image as the premier international bank
Objectives of HSBC:
The HSBC Group is named after its founding member, The Hongkong and Shanghai
Banking Corporation Limited, which was established in 1865 in Hong Kong and
Shanghai to finance the growing trade between China and Europe.
Thomas Sutherland, a Hong Kong Superintendent of the Peninsular and Oriental Steam
Navigation Company helped to establish this bank in March 1865. Throughout the late
nineteenth and the early twentieth centuries, the bank established a network of agencies
and branches based mainly in China and South East Asia but also with representation in
the Indian sub-continent, Japan, Europe and North America.
The post-war political and economic changes in the world forced the bank to analyze its
strategy for continued growth in the 1950s. The bank diversified both its business and
its geographical spread through acquisitions and alliances.
HSBC Holdings plc, the parent company of the HSBC Group, was established in 1991
with its shares quoted on both the London and Hong Kong stock exchanges. The HSBC
Group now comprises a unique range of banks and financial service providers around
the globe.
HSBC maintains one of the worlds largest private data communication networks and is
reconfiguring its business for the e-age. Its rapidly growing e-commerce capability
includes the use of the internet, PC banking over a private network, interactive TV, and
fixed and mobile, including wireless application protocol or WAP-enabled mobile,
telephones.
The HSBC Group has a history, which is unique. Many of its principal companies
opened for business over a century ago and they have a history rich in variety and
achievement.
The inspiration behind the founding of the bank was Thomas Sutherland, a Scot who
was then working as the Hong Kong Superintendent of the Peninsular and Oriental
Steam Navigation Company. Realizing the considerable demand for local banking
facilities both in Hong Kong and along the China coast and he helped to establish the
bank in March 1865. Then, as now, the bank's headquarters were at 1 Queen's Road
Central in Hong Kong and a branch was opened one month later in Shanghai.
Throughout the late nineteenth and the early twentieth centuries, the bank established a
network of agencies and branches based mainly in China and South East Asia but also
with representation in the Indian sub-continent, Japan, Europe and North America. In
many of its branches the bank was the pioneer of modern banking practices. From the
outset, trade finance was a strong feature of the bank's business with gold bars,
exchange and merchant banking also playing an important part. Additionally, the bank
issued notes in many countries throughout the Far East.
During the Second World War the bank was forced to close many branches and its head
office was temporarily moved to London. However, after the war the bank played a key
role in the reconstruction of the Hong Kong economy and began to further diversify the
geographical spread of the bank.
The Making of the modern HSBC Group:
The post-war political and economic changes in the world forced the bank to analyze its
strategy for continued growth in the 1950s. The bank diversified both its business and
its geographical spread through acquisitions and alliances. This strategy culminated in
1992 with one of the largest bank acquisitions in history when HSBC Holdings
acquired the UKs Midland Bank plc (now called HSBC Bank plc). However, it
remained committed to its historical markets and played an important part in the
reconstruction of Hong Kong where its branch network continued to expand.
Many of the members have changed their name into HSBC, The Hongkong and
Shanghai Banking Corporation Limited to introduce the whole group under one brand
name.
Midland Bank HSBC Holdings acquired Midland Bank one of the principal UK
clearing banks in 1992. Headquartered in London, the bank has a
personal customer base of five and a half million, business customers of
over half a million, and a network of almost 1,700 branches in the
United Kingdom. Midland has offices in 28 countries and territories,
principally in continental Europe, with a number of offices in Latin
America.
Hang Seng Hang Seng Bank, in which Hongkong Bank has a 62.1% equity
Bank
interest, maintains a network of 146 branches in the Hong Kong SAR,
where it is the second largest locally incorporated bank after Hongkong
Bank. Hang Seng Bank also has a branch in Singapore and two branches
and two representative offices in China.
Marine Marine Midland Bank headquartered in Buffalo, New York, has 380
Midland Bank
banking locations statewide. The bank serves over two million personal
customers and 120,000 commercial and institutional customers in New
York State and, in selected businesses, throughout the United States.
Hongkong Bank Hongkong Bank of Canada is the largest foreign-owned bank in
of Canada
Canada and the countrys seventh-largest bank. With headquarters in
Vancouver, it has 116 branches across Canada and two branches in the
western United States.
Banco HSBC Banco HSBC Bamerindus was established in Brazil in 1997. The bank
Bamerindus
has network of some 1,900 branches and sub-branches, the second
largest in Brazil.
Hongkong Bank Hongkong Bank Malaysia is the largest foreign-owned bank in
Malaysia
Malaysia and the countrys fifth-largest bank, with 36 branches.
The British The British Bank of the Middle East (British Bank) is the largest and
Bank of the
most widely represented international bank in the Middle East, with 31
Middle East
(British Bank) branches throughout the United Arab Emirates, Oman, Bahrain, Qatar,
Jordan, Lebanon and the Palestinian Autonomous Area, including an
offshore banking unit in Bahrain. The bank also has branches in
Mumbai and Trivandrum, India, and Baku, Azerbaijan, as well as
private banking operations in London and Geneva.
HSBC Banco HSBC Banco Roberts was acquired in 1997. Based in Buenos Aires, it
Roberts
is one of Argentinas largest privately owned banks, with 60 branches
throughout the country.
Hongkong Bank Hongkong Bank of Australia has 16 branches across Australia. It is the
of Australia
flagship of the HSBC Groups businesses there, operating under the
name HSBC Australia, and providing a complete range of financial
services.
The Saudi The Saudi British Bank, a 40%-owned member of the HSBC Group,
British Bank
has 63 branches throughout Saudi Arabia and a branch in London.
Other associated Group banks are British Arab Commercial Bank, The Cyprus
Popular Bank and Egyptian British Bank.
2.4 Customer Segments of HSBC Group
To ensure that the key resources (management time, capital, human resources and
information technology) are correctly allocated and that the exchange of best practice is
accelerated between entities, the group has classified the countries where it operates
into 3 categories: the large, the major and the international.
Definition
More than one million personal clients
Sustainable earnings greater than US$ 200 million
Business Focus
Major: Argentina, Canada, Malaysia, India, Kingdom of Saudi Arabia, Singapore and
United Arab Emirates.
Definition
Business Focus
Definition
A key part of the Groups business strategy, announced in 1998, is the creation of a
global brand featuring the HSBC name and hexagon symbol. The symbol is now a
familiar sight around the world. The Group has embarked on the next phase making
the HSBC brand universally synonymous with its core values of integrity, trust and
excellent customer service.
The Hexagon logo of HSBC derives from HSBCs traditionally flag, a white rectangle
divided diagonally. The design of the flag was based on the cross of ST.Andrew, The
Patron Saint of Scotland.
HSBC brand & corporate identity represents what HSBC wants its brand to mean to its
customer. It is derived from the group:
Corporate Character:
Basic Drives:
HSBCs basic drives are Higher Productivity, Team Orientation, and Creative
Organization, & Customer Orientation.
The essence of HSBC brand is integrity, trust, and excellent customer service. It gives
confidence to customers, value to investors, & comfort to colleagues.
Through the process of listening to individuals needs and then acting in partnership to
deliver the right solutions, HSBC is committed to help the clients make the most of
their financial assets.
HSBC operate on a global basis, but also work on a local level to ensure the cross-
border differences are identified and any related benefits exploited. HSBC teams of
specialists ensure that whether you need solutions across the world, regionally, or
locally, and they have the skills, expertise, and resources to deliver them. They
automate as many functions as possible, even as ensuring retains control.
HSBC claims that they are the people to talk to if anyone wants the following: -
A minimum of bureaucracy;
HSBCs reputation is founded on adherence to these principles and values. All actions
taken by a member of HSBC or staff member on behalf of a Group company should
conform to them.
Chapter 3: Overview of HSBC Bangladesh
HSBC Bangladesh currently provides services from two of its full service branches one
in Dhaka and the other one in Chittagong. Besides these offices there are two personal
banking Booth offices located at Gulshan & Motijheel, and a new branch opened at
Dhanmondi. There is currently nine ATMs operating in Dhaka and 1 in Chittagong.
The Hongkong and Shanghai Banking Corporation Limited offers a full range of
personal banking products and services designed to take care of its customers growing
needs and requirements. HSBC in Bangladesh has launched a number of loan products
during 2000. Personal Installment Loan is an unsecured loan that does not require any
personal guarantee or cash security; Car Loan, also, does not require any down
payment or personal guarantee. The Bank has already launched Phone banking, a
state-of-the-art automated telephone banking service available 24 hours a day, 7 days a
week, and 365 days a year, which allows customers to access their account from the
comfort of the office or home. HSBC is the market leader in the local Auto pay service
with which the company can initiate bulk Taka payments to, or Taka collections from,
any HSBC current or savings accounts of counterparts for a specified sum at a specified
date, regardless of the branch. HSBC also offers Power vantage, a unique all-in-one
package of products and services designed to give total financial control to the
customer; a unique savings account, which allows the customer to do any number of
transactions without any charges being incurred or credit interest lost. To satisfy the
growing needs of real estate HSBC Bangladesh recently launched Home Loan Scheme
and a special type of deposit product named Bangladesh International for non-
resident Bangladeshi.
The Hongkong and Shanghai Banking Corporation Limited offers a wide range of cash
financing, working capital, short and medium-term loans and guarantee facilities from
its Head Office and Chittagong branch. The Offshore Banking Unit (OBU) provides US
Dollar denominated working capital as well as short-term finance for capital imports to
eligible businesses. Using high-speed communication links, HSBC connects customers
to international payment systems.
Trade Services:
As the leading provider of trade finance and related services to importers and exporters
in Asia, HSBC in Bangladesh operates a highly automated trade-processing network
and offer an Electronic Data Interchange (EDI) capability through Hexagon. The Bank
also uses SWIFT, an efficient and secure mechanism for bank-to-bank global
communications used for all trade related activities including fund transfers and
issuance of DCs (Documentary Credit).
Financial Institutions:
HSBC provides global trade services and cash management services to local banks.
HSBCs worldwide network strength, with over 7000 offices in 81 countries and
territories, coupled with a world class reputation in Trade Finance (Best Trade
Documentation Bank Euro money) and an unparalleled presence in Asia (Best
Bank in Asia Euro money), places HSBC in an ideal position to render unmatched
correspondent banking services.
HSBCs commanding presence in the USA (5th largest USD clearing bank globally),
UK (largest GBP clearing bank globally), and the Euro land (largest Euro clearing bank
in the UK) both in terms of network strength and clearing ability allows the Bank to
provide first class cash management solutions in 3 major global currencies; US dollar,
Pound sterling, and the Euro.
With Hexagon, the Banks proprietary cash management system, corporate customers
can access banking services from anywhere in the world to view account balances and
statements, make transfers and international payments, and to open documentary
credits, by using only a PC, a modem, and a telephone line.
Chapter 4: An Overview of Functional Departments
HSBC Bangladesh is such a company that has to overcome a lot of hurdles to reach the
position it now holds. At present, Mr. Mark Humble is the CEO; Mr. Adil Islam is the
chief of Corporate Banking; Mr. Adnan Wahed is COO, Mr. Joo baknner is the Chief of
Personal Banking or as known in HSBC, Personal Financial Services (PFS) Head, and
Mr. Syed Akhtar Hossain is the Human Resource Manager at HSBC Bangladesh.
These five men at the top carried out their management roles comprehensively and
systematically. They equally contributed to HSBCs superior leadership, by carrying
out their unique roles. They worked well together, respecting each others abilities, &
arguing openly, & without any resentment when they disagreed.
To maintain a close touch with the organization each man works in separate area of
HSBCs complex. Their offices are indistinguishable from all other cubicles where
HSBCs junior executives & secretaries work in. There are no office walls in HSBC
and all the staff starting from the CEO to the lower operating level employees shares
the same premises under one roof. There are no specialized cabins for top management
and executives and also no executive dining rooms. This has created a management
team that is unified, cohesive, & energetic.
Each and every employee of HSBC takes pride of being an employee at HSBC and his
or her pride comes from the freedom of direct communication with the top
management. The management of HSBC is supportive in the sense that the top
management deliberately supports the suggestions, values, ideas, innovation, and hard
work of the employees and officers. Again high amount of employee participation is
encouraged in the management process. There are also systems for awards, incentives,
and status for innovative ideas and hard works. Again the management style can also be
termed as collegial as high amounts of teamwork and participation exists between the
top and bottom parts of HSBC.
Officers are the next persons to stand in the hierarchy list. They are the typical mid-
level employees of HSBC organizational hierarchy. These officers are responsible for
managing the operational activities and operating level employees. The operating level
employees of HSBC who are ranked as Assistant Officer fill the last layer of this
hierarchy. They perform the day-to-day operational activities of HSBC. An
organizational hierarchy chart is shown below:
Managers
Executives
Officers
Assistant Officers
Credit
Department
The Human Resource Manager currently heads this department. The major functions of
this department are strategic planning and policy formulation for Compensation,
Recruitment, Promotion, Training, and Developments, Personnel Services, and
Security. The HR department is very much concerned with the discipline that is set up
by the HSBC group. HSBC group has got strict rules and regulations for each and
every aspect of banking, even for non-banking purposes; i.e. the Dress Code. All these
major personnel functions are integrated in the best possible way at HSBC, which
results in its higher productivity. The Human resource officer monitors the employee
staffing and administration activities. The Training officer supervises training,
development, & rotation activities. The structure of the HR department is shown below:
Human Resource
Manager
Human Development
Resource Officer
Officer
AO AO AO AO
Staffing Administration Training Appraisal
PFS
Head
Branch Staff Branch Staff Branch Staff Branch Staff Branch Staff
Team Team Team Team Team
Operations:
Manages daily operation
There are five branches of HSBC, four situated at different locations in Dhaka and one
at Chittagong. Only the Dhaka office (head office) & Chittagong branch deals with
both corporate and personal banking. Other three offices only deal with the personal
banking activities. Their functions are to provide various financial services to the
consumers. These include customer services, sale of various PFS products, opening
new accounts, providing cash, remittance, and other teller services, etc. The branches
are quite decentralized for better delivery of services to customer and have their own
premises and facilities. Branch managers head these branches. Each branch is staffed
with its own team of employees. A great deal of teamwork is seen within these
branches. ATMs are situated with each branch premises.
CSM
DAK Branch
Officers Officers
Front Office Back Office
Figure 9: Branch Network
The personal banking credit department deals with the consumer credit schemes such as
the Personal loan, Car loan, Travel Loan, Personal Secured loan, etc. which are tailored
to meet the demand of individual customers. The manager of PFS credit who approves
and administers all the activities of this department. He is staffed with five approval
officers, four operations officers, and two MIS officers. The approval officers mainly
reject or approve the credit requests. After being checked by the approval officer, the
credit requests go to the operations for further processing of the application and
disbursement. This department is a member of ALCO (Asset Liability Management
Committee), which coordinates in preparation of lending analysis and data on
concentration of risk and identifies possible lending risks. This department is also
responsible for monitoring all necessary documents and securities related to loans.
The ATM center ensures smooth operation of the ATM machines that are located at
Dhaka and Chittagong. The ATM center is responsible for regular replenishment of the
off-site ATMs and servicing of all the ATMs. Currently a total 10 ATMs are in
operation. The ATM center also deals with issuance, termination, and servicing of the
ATM cards. On a whole, the ATM center is the department that is solely responsible for
all the activities related to ATM and is the facilitating department that enables
customers 24 hours banking support.
This department is under the same manager as the ATM center. They basically deal
with all the buying and selling of government bonds and treasury bills as per customer
instruction, i.e. BSP, PSP, and TSP etc. This department keeps under its control the
transactions regarding USDB, USDIB, and WEDB.
4.10 ATB Center
ATB refers to Automated Tele Banking. This department deals with the back office
serving the HSBC phone banking services provided to customers. This department is
basically responsible for the activation of ATB, ATB pin generation, and ATB security
management, ATB blocking and troubleshooting of all ATB problems. This department
is fairly new and was constructed on January 2000. Currently this department is staffed
with two executive and two officers.
Hexagon:
The Hexagon department deals with all aspects related to HSBCs unique banking
software product - Hexagon. It is the global Electronic Banking system of HSBC,
which offers the customers more convenient and efficient banking than ever before. It
is an innovative desktop banking system developed by the HSBC group, which
operates via the groups proprietary worldwide communications network.
Trade service is known by various names in other banks, e.g. Trade Finance Foreign
Exchange, Foreign Trade etc. However, the functions are the same. As the name
suggests, this department is involved in facilitating trade, both international & within
Bangladesh. HSBC is the leading provider of trade finance and related services to
importers and exporters in Asia. Trade is considered a core business of the group. The
groups presence in 81 countries of the world gives a good opportunity to control both
ends of a trade transaction and keep the business within the Group. The various awards
it has won from the leading publications of the world acknowledge HSBCs excellence
in trade. The trade service department has two separate subsidiaries: Credit
Administration & Foreign Exchange Division.
Credit Administration:
The For-ex division of trade services is solely concerned with the management of
Foreign exchange inflow and outflow. The For-ex division of trade service in relation
with NSC and FCD manages the foreign currency traffic of HSBC that originates from
Corporate Banking and trade services.
This is considered as the most powerful department of HSBC. It keeps tracks of each
and every transaction made within HSBC Bangladesh. Manager of FCD who ensures
that all the transactions are made according to rules and regulation of HSBC GROUP
heads it. Violation of such rules can bring serious consequences for the lawbreaker.
FCD is responsible for the preparation of the Annual Operating Plan (AOP), monitoring
treasury risk limits, profit exposure, and maintaining strong liquidity. FCD is the key
member of the Asset Liabilities Management Committee (ALCO), which deals with
how efficiently the banks assets and liabilities are managed. FCD also deals with
money market matters. FCD acts as a custodian of all vouchers. FCD as the name
implies does all the banks monitoring of the banks internal compliance and all local
regulatory requirements.
The functions of FCD are briefly discussed below along with an organogram of the
department:
Manager
FCD
FC keeps records of all the accounts of HSBC. All the vouchers, notes, advices and
transaction reports of the branches are sent to FC for record keeping purposes. FC also
prepares the financial statements for the banks and decided upon banks assets and
liabilities. It also deals with the returns that are submitted to the Central Bank on
regular interval.
4.16 Treasury
This department works under FCD. Their main job is to take decisions regarding
purchase and sell of foreign currency. The purpose of treasury's operations is to utilize
the funds effectively and arrange funds at a lowest possible rate of interest, through
maintaining effective relationship with other banks and following the Government rules
and foreign exchange regulations
PCM deals with the inter-bank payment. PCM strategies are designed to ensure
efficiency, profitably, and comprehensive support.
This is an integral and vital part of the bank. The services department ensures smooth
operation and functioning within and between all the departments of HSBC. It also
provides continuous support to the core banking activities of HSBC. The Manager of
Services heads this department who formulates and manages various critical issues of
the services function of HSBC. He is followed by a group of executives who are the
heads of various subsidiary divisions that operate within the services department. The
services department is considered as the backbone of all other departments. The various
subsidiary divisions within this department are Administration, IT, Internal Control
(IC), Network Services Center (NSC), and HUB. A structure of the services
department is presented below followed by a briefing of the subsidiary divisions:
Manager
Services
Like any other organizations, the Admin department of HSBC makes sure that the
organizations moves on with all its departments and staffs operating according to all the
rules and regulations of the company. It also prevents any bottlenecks within the work
process and ensures smooth functioning. The admin department has two divisions
General Administration and Business Support Services.
The general admin division is pretty much similar to the admin departments of other
companies that ensure discipline and regulatory concerns. The business support
services provide supports to the departments during employee leaves and sudden
terminations so that the department can function without problems.
This department gives the software and hardware supports to different departments of
the bank. As HSBC is engaged in online banking, the role of IT is very crucial for the
bank. This department is the most active department of HSBC where employees always
stand by to solve any problems in the system. The managers and executives of IT
division work continuously to develop the total IT system of HSBC so that it can be
operated with ease, accuracy, and speed.
HSBC has internal auditors who visit on regular basis and submit the report to the
higher authority for audit purposes. This gives different departments the chance to
know their mistakes and take necessary corrective actions. Again, the Bank annually
administers a company wide audit program to evaluate the overall performance of the
bank in Bangladesh.
The HSBC banking system is called HUB. HSBC does the online banking and it is
HUB, which sets up the parameter for that. This HUB is linked with the HSBC group
via satellite and each and every transaction made by HSBC within Bangladesh is being
recorded at the HSBC Asia-pacific headquarters at Hong Kong via HUB. Thus the
HUB is the most powerful and important equipment of HSBC Bangladesh that
monitors and tracks any fraud and faults made with HSBC Bangladesh.
This department can be described as the Power House of HSBC Bangladesh. NSC
does the back office job for the bank. The main four jobs that are performed by NSC
are Clearing, Scanning of signature cards, issuing checkbooks, and sending & receiving
Remittances. NSC looks after the clearing process of HSBC and makes necessary
contact with the central bank for maintaining account flows. All the customer
signatures are scanned in this department and are entered into the system. NSC also
issues checkbooks for new and old accounts based on requisition from various
branches. Remittance is a banking term, which means Transfer of funds through
banks. When a bank remits on behalf of its customers, it is termed as outward
remittance. On the other hand, when the bank receives the remittance on behalf of the
bank, it is inward remittance. The following methods that NSC uses to remit money for
customers: Telegraphic Transfer (TT), Demand Draft (DD), & Cashiers Order.
4.24 Marketing Department
The sixth major department of HSBC is the marketing department. The marketing
department of HSBC play a vital role in fostering the continuos growth HSBC in
Bangladesh. A manager is assigned to this department who looks after the overall
marketing operation of HSBC in Bangladesh. This department is basically concerned
about marketing the companys products, services, and building a strong corporate
image. The marketing department of HSBC has three subdivisions: Direct Sales,
Promotion, & Marketing Administration.
Manager
Marketing
While the overall contract and the transaction are different, the DC itself does
not differ significantly from conventional DCs. A small number of clauses are
proposed to be mandatory in Bangladesh i.e. no TT reimbursement is allowed
and payment is made only upon receipt of documents at counter, the goods are
consigned to the order of the Bank, and the beneficiary has to notify the
applicant of the shipment. These are standard clauses in Bangladesh market and
are normal business practice and local norm.
Although the above will support a full range of DC and related products, we will
be using only DCI, IBR, SIG, AWI and CLI for the time being.
Discrepant Documents
Discrepant documents should be treated the same as with a discrepant document
for a conventional DC. All other Amanah procedures still apply.
Partial Shipments
For each DC, one DC application and one transaction notice are required. For
partial shipments, a separate Murabaha Notification must cover each shipment.
Late payment
For late payment, the same charges will apply as with a conventional DC. These
are generated automatically by the system. No changes are necessary in the
system, however when talking to the customer interest should not be mentioned.
Under Shariah requirements the bank will have to purchase the goods before it is
allowed to sell them on cash or deferred payment basis. The bank is
however allowed to appoint an agent who can go in the market and source
the goods for the bank. Since it is recognized that the bank is not in a
position to buy the goods itself it will appoint the customer as its
undisclosed agent (solely) for the purpose of sourcing the required goods
and purchase them on behalf of the bank. This will also include negotiation
with the seller or exporter. The bank after the purchase can sell the goods to
the customer.
Financing Requirements:
With the offer to buy or any time before receipt of the offer to buy, under
Shariah, the customer must inform the bank if they require any financing.
If the customer informs that they require any financing after the receipt of
the Offer to Buy, the transaction is not Shariah compliant. Bank still can
provide financing but the customer is aware that the transaction is not
Shariah compliant.
Murabaha:
MN is essentially a formal offer from the customer to purchase the goods from
the Bank. It will stipulate that the customer has obtained goods and offers
to buy the goods on "as it is" basis on the shipment date. This is again a
Shariah requirement.
Promise to Purchase:
Shariah:
Refers to the Islamic legal tradition, which is sometimes called Islamic Law
(literally it means 'a path to life-giving water')-
Transaction Notice:
It is required by Shariah to have specific notice under each shipment. The MMA
will have a general agreement and will assume that transactions will be
conducted from time to time; however Transaction Notice will ensure that
each party is aware of the details. Without a Transaction notice the DC will
not be Shariah compliant. It should be received with the DC application.
Wakala
Islamic term for agency.
Chapter 5: Products & Services
HSBC Bangladesh carries out all traditional functions, which a commercial Bank
performs such as mobilization of deposit, disbursement of loan, investment of funds,
financing export & import business, trade & commerce & so on. Besides it also offers
some specialized services to its customers. Products & services offered by HSBC can
be categorized according to the customers they serve. Thus two major groups can be
identified. They are individual customers or consumers & corporate customers or
organizations. An in-depth analysis of HSBCs product and services in Bangladesh is
presented in this section. First of all, the liability products of the bank are discussed.
After that the various products and services of personal banking division will be
presented, followed by a brief discussion of the corporate banking services offered to
corporate clients. The summary of all the products and services of HSBC Bangladesh is
displayed in the following page.
5.1 Accounts
Savings Accounts:
Unlike other banks there is no ledger fee and any interest accrued is not
lost
Customers can issue any number of cheque or withdraw any amount
Interest is calculated on daily credit balance (not on average credit
balance) and paid half yearly
Only condition to earn interest is maintaining a minimum balance of BDT
25,000/-
Relationship fee is BDT 300/- per quarter if average relationship falls
below BDT 50,000/- for three months.
Current Account:
This is also a depository account basically designed for various customers. This is a
non- interest bearing accounts and the features of this account are as follows:
Proprietorship companies
Partnership companies
Limited Companies
Liaison offices
NGOs
Fixed Deposit:
It is also known as term deposits. These deposits are made in the bank for a fixed
period of time. This period of time should be specified in advance. The bank needs not
to maintain cash reserves against these deposits & therefore, it offers interest rates that
are higher than the savings accounts.
The simple, safe, and flexible way to enjoy guaranteed monthly return-
Resident Bangladeshi
Features-
Features-
Travel Loan is offered within the existing Personal Installment loan structure. The
purpose of launching this product is to attract and aid customers with their travel
related services.
Loan amount is minimum loan amount is BDT 50,000/- and maximum loan
amount is BDT 5,00,000/-
Interest rate: 15%
Tenure: Maximum loan tenure is 36 months. If loan amount is BDT 4,00,000/-
or above then maximum tenure is 48 months.
Loan processing fee: 1% of the loan amount or BDT 1,000/- whichever is
higher + stamps BDT 170/-
No personal guarantee is required
Personal Secured Loan is a simple stand by loan against the Time Deposit and NRB
Bonds and the loan is repayable in equal monthly installment.
Personal Secured Credit is a credit facility against Time Deposits and NRB Bonds that
enables customers to have the flexibility to meet short-term commitments without
unlocking their long-term investments.
Customers can borrow up to 90% of their LCY TMDs and WEDB value
WEDB and USDBs issued from HSBC and other multinational banks are
considered
Minimum loan amount is BDT 90,000/-
Maximum loan amount 90% of LCY TMD amount or WEDB and 80% of FCY
TMD or USDBs.
Eligibility:
HSBC offers wide range of cash financing, working capital, short, and medium-term
loans, and guarantee facilities to its corporate customers. Its offshore banking Unit
(OBU) provides US dollar denominated working capital as well as short tem finance
for capital imports to eligible businesses. HSBC is a worldwide leader in banking and
financial services whose success is based on its relationships with its clients. Whether
locally or around the world, HSBC offers a comprehensive range of services that can be
tailored to the company's needs. Some major services provided by HSBC corporate
division are Custody services, Global payment & cash management, Trade services, &
Hexagon.
HSBC's Global Payments and Cash Management services are designed to help its
clients to operate efficiently, profitably and with comprehensive support. The aim is to
provide a service that takes full account of the customers local needs as well as
regional and international requirements using our expertise and global resources of the
HSBC Group. PCM provides the following services to its clients:
HSBC is the leading provider of trade finance and related services to importers and
exporters in Asia. The bank operates a highly automated trade-processing network and
offers an electronic data interchange (EDI) capability through Hexagon. Some services
provided by HTV are as follows:
A full range of import services handled by experienced staff is available, ensuring that
clients import documents are processed without delay. Some import related services
are- Import collection services, Import financing services, Import documentary
advising, Processing, and advising on shipping guarantees.
HSBC provides advices on any aspect of export document preparation. It also provides
working capital finance to help the sourcing of raw materials. Some other export
services are- Pre-shipment Financing, Post shipment Financing, Purchase of Export
bills, Back-to-Back credit, and LC, Documentary credit advising, Documentary
checking.
A major concern for many exporters is the reliability of the LC issuing bank,
particularly if shipments are going to less familiar markets. If these banks get into
difficulties, the exporter may not get paid. That's where HSBC comes in. Under the
Trade Safe Service, HSBC absorb the bank and country risk, allowing clients to
concentrate on growing business.
So these are some of the services provided by HSBC trade services.
6.14 Hexagon
Hexagon is the HSBC Group's global electronic banking service, specifically designed
for the corporate market. It gives a customer access to one of the largest banking and
financial services organizations in the world - 24 hours a day, seven days a week.
Hexagon is one of the most advanced and easy-to-use electronic banking packages on
the market today. It has been designed to make life easier for the customers; with
Hexagon businesses can become more efficient, increase accuracy, and reduce costs.
Hexagon offers an extensive and growing range of financial services, including global
cash management, trade services, foreign exchange, and securities, all from a single
PC.
Hexagon uses the HSBC Group's Global Data Network, the largest private system of its
kind in the world. Additionally, it has a comprehensive range of system security, and
control features together with its use of full data encryption, means the data is totally
secure.
Account information:
Hexagon provides access to all the customers accounts. In addition to the latest
available balances, Hexagon offers full statement information that can be tailored to
customer requirements.
Report Writer
The account information can be quickly and easily printed using the flexible Report
Writer Service or the information can be exported to some other formats.
Export
Export allows account details to be exported in variety formats. This enables Hexagon
to act as a true financial link between the bank's computer systems and the customer
own back-office accounting packages.
Reconciliation
Payments:
Transfers between accounts and payments to third parties are easily achieved in more
than 60 currencies anywhere in the world. Both priority payments and low-value
automated clearing-house payment options are available in Hexagon.
Exports Documentation:
Hexagon gives the customers the ability to view outstanding documentary credits and
bills in summary or a more detailed format, including interest details where financing
has been requested. Coupled with account information, companies are able to track the
whole export process from the point when the documentary credit is opened or bill is
presented through when settlement is made.
Import Documentation:
With the import option, a customer can easily create and amend documentary credit
(DC) applications and submit them online.
So these were some of the very important services provided by HSBCs unique banking
software HEXAGON.
HSBC also offers some other facilities to its customers. They are Factoring, Forfeiting,
Guarantees, Hire Purchase Finance, Leasing, Tender Bond, and Performance Bonds. All
these services and products are designed to meet the total business needs of the
corporate clients of HSBC.
Critical Functional Issues
An executive is assigned to this part of the marketing department. The Direct Sales
division co-ordinate & manages the sales activities of all the Mobile sales officers
(MSO) of HSBC Bangladesh. The MSOs basically makes sales of the company
various Personal Banking products such as savings accounts, consumer loan, etc
outside the banking premises. There are a total of more than 100 mobile sales officers
(MSO) employed in the cities of Dhaka and Chittagong. MSOs are assigned to specific
branches for making sales activities more smoothly. The DS executive sets sales
strategies & targets for the sales officers and manages the whole team of MSOs in
Bangladesh. The direct sales department also decides upon the commission and
remuneration of the mobile sales officers as their salary structure is based on sales
performances. Thus this part of the marketing division is very important for the overall
growth of the Personal Banking Division.
Promotion:
This part of the marketing department deals with all the promotional activities of HSBC
Bangladesh. Prime responsibilities of this department are: Maintaining strong public
relations with various media intermediaries, advertising the companys products, and
services, building a strong corporate image of HSBC in Bangladesh.
Public Relations:
The promotion also coordinates all the advertising of HSBC products within
Bangladesh. Some of the advertising tools that are frequently used by the company are
as follows:
So these are some of the promotional activities managed and coordinated by the
promotion department.
7.2 HR Issues
Recruitment, Training and Development:
HSBC Bangladesh limited follows a standard procedure for recruitment and selection.
However there is no set time period when this recruitment and selection takes place.
Each departmental head places the requisition for recruitment to the Human resource
officer, if any vacancy is created due to (1) Retirement, (2) Resignation (3) Death, or
(4) Extra workload.
The process for the recruitment of personnel for managerial and non-managerial level
differs slightly but the basic steps are same in both the cases. Before mentioning the
steps of the selection process it is worth mentioning that there is a unique policy in the
HR department which states that a person will not be eligible to apply for any vacancy
if his or her first-cousin, brother/sister or spouse works in any of the branches of
HSBC. The steps are-
In order to enhance the efficiency of the employees, HSBC gives emphasis on the both
theoretical and practical training for its personnel. All the training and development
programs are aimed at two basic reasons - (1) Skill development (2) Motivation
through counselling and persuasion to change value system. For the top management or
senior managers there is provision for overseeing training arranged by HSBC group.
For the mid-level manager or other managerial level there is provision for regional
training courses. Besides, for non-management level there are training programs
arranged in different institution and also with in the organization. For the operatives,
various on the job-training program are conducted within the company. Finally, HSBC
Bangladesh limited follows a performance based promotion system for all levels of its
employees.
Performance Appraisal:
The company follows both rating and descriptive systems for the performance
appraisal. Although the appraisal system is non-participative, the employees are
annually assessed with a joint consultation with their immediate supervisor and
departmental head.
HSBC has many well-structured welfare policies for its employees. These include well-
structured wage & salary policy, medical facility, sports & cultural facilities, provision
for loans, free uniform etc. These welfare policies aim at strengthening the relationship
of the employees to the organizations and make them more responsible in their
respective positions. The brief description of the major welfare policies are stated
below:
HSBC follows a well-defined wage structure and fringe benefits for its employees. The
wage structure is updated periodically (Two years terms) by the management. The
major deciding factors are-
i) Profitability of the company
ii) Average cost of living in the country due to year to year basis inflationary
trend
iii) Status of wage earners in similar organization
iv) Restrictive conditions given by the government from time to time
v) Financial benefits status in the company
vi) Components of existing wage structure:
vii) Base basic structure and conveyance allowance
Chapter 8: Industry Analysis
8.1 Industry Analysis
Industry analysis builds on customer & competitor analysis to make more strategic
judgment about a market & its dynamics. One primary objective of industry analysis is
to determine the attractiveness of a market to current & potential participants. A second
objective of a market analysis is to understand the dynamics of the market.
The need is to identify the key emerging factors, trends & threats, opportunities, &
strategic uncertainties that can guide information gathering & analysis. Porters
approach can be applied to an industry, but it can also be applied to a market or sub-
market within the industry. The basic idea is that the attractiveness of an industry or
market as measured by the long-term return investment of the average firm depends
largely on five factors.
A complete understanding of the competitive area helps to guide strategy design &
implementation.
The rivalry among the competitors and the growth in the industry depends upon the
intensity of competition. A high intensity of competition is observed in the banking
sector of Bangladesh. There are more than 50 commercial banks in Bangladesh that
fight for their own share of the market. The national banks have the highest banking
network in Bangladesh. They compete against the banks with their low cost of
operation and government support. Again, Standard Chartered Bank is the largest
multinational banking network in Bangladesh that has its network in many
metropolitans of Bangladesh. There are other international banks that also take part in
the competition and aggressive in nature. This high intensity of competition makes
companies difficult to sustain in the long run.
Bargaining Power of of
Bargaining Power
Suppliers
Suppliers
Supplier concentration
Supplier concentration
Number of of
buyers
Number buyers
Switching cost
Switching cost
Substitute raw materials
Substitute raw materials
Thereat of forward
Thereat of forward
integration
integration
Threat of of
Potential
Threat Potential
Entrants The Industry
Entrants The Industry
Economies of of
Scale (Degree of of
Rivalry) Pressure from
Economies Scale (Degree Rivalry) Pressure from
Brand identity Substitute
Brand identity Substitute
Capital requirement Differentiation
Capital requirement Differentiation
Access to distribution No.No.
&&Size of of
players Price of of
substitute
Access to distribution Size players Price substitute
Regulatory policies Industry Growth Product identity
Regulatory policies Industry Growth Product identity
Switching cost Brand Loyalty Functional similarity
Switching cost Brand Loyalty Functional similarity
Reaction from existing Exit Barrier
Reaction from existing Exit Barrier
players
players
Bargaining Power of of
Bargaining Power
Buyers
Buyers
Buyer Concentration &&
Buyer Concentration
Size
Size
Number of of
Suppliers
Number Suppliers
Switching Cost
Switching Cost
Substitute Products
Substitute Products
Threat of backward
Threat of backward
integration
integration
In the context of HSBC the various new & upcoming Banks pose a significant threat,
being new entrants in the banking sector of Bangladesh. But HSBC is aware of these
potential competitors. So it is trying to expand countrywide to make the sector
unattractive & to create entry barrier.
HSBC continuously faces the threat of various substitute products launched by its
strong competitors in the market place. For example, the launch of premier banking by
SCB poses a strong threat on HSBCs premium customer group and HSBC is at a
condition where it should launch an even better product. Moreover the various
consumer credit schemes offered by various local banks with lower interest rates and
cost also poses a strong threat on the HSBC personal banking products. Again the lower
service charges at national banks also discourage a wide group of customers to hold
account in HSBC. So these are some of the threats posed by substitute products in the
market place.
In the banking sector of Bangladesh, customers have a strong bargaining power since
there are a large number of commercial banks providing similar services. Customers
have a wide range of options in deciding either go for the multinationals or turn to new
local banks for getting quality service. Others may also consider the national banks for
large credit facilities. Therefore banks have to pursue the customers with attractive
interest rates and provide them with tailor made customized services in order to attract
the customer or hunt depositors.
In the context of HSBC, the firm is more or less free from the cope of the bargaining
power of the buyers. HSBC has its own policies to carry out its operations &
employees follow those rules to deal with the customers. But too much rigidity of the
prevailing policies while dealing with the clients may under cut its client base as well
as profitability. To overcome this worst scenario a positive & personalized approach
to the needs of customer - has become HSBCs motto.
Distinct Schedule:
Everyone in HSBC from the appraiser to the top management has to work to the same
schedule toward a different aspect of the same goal, interfacing simultaneously at all
level over quite a long period of time.
Efficient Performance:
HSBC provides hassle free customer service to its client base comparing to the other
financial institutions of Bangladesh. Personalized approach to the needs of customers is
its motto.
Companionable Environment:
All office walls in HSBC are only shoulder high partitions & there is no executive
dining room. Any of the executives is likely to plop down at a table in its cafeteria &
join in a lunch chat with whoever is there. One of the employees has said, Its exciting
to know you may see & talk to the top management at any time. You feel a real part of
things.
No Communication Barriers:
Many organizations are trying hard to avoid communication barriers & structural
bureaucracies. The little existence of authoritative barriers among the different level of
management stimulates a feeling of importance as their work get priority over the
position.
Equalization:
At HSBC, workshops are conducted periodically. On the workshops, all people
participate as equals with new members free to openly challenge top managers.
MBO:
HSBC also has Management by Objectives (MBO) everywhere. Each person has
multiple objectives. All the employees must have to get the approval of their bosses on
what they are going to do. Later they review as how well they have performed their job
with their management as well as the peer group.
One-to-one Meeting:
The MBO makes the review a communication device among various groups. The key
to the system is a one-to-one meeting between a supervisor & a subordinate. In the
meeting, the problems in dealing with customers are put forward first & every one dug
it to solve.
Weaknesses:
Narrow Operating Span:
HSBC has a very narrow operating span in Bangladesh. It has only 2 full service
branches in Bangladesh situated only at Dhaka and Chittagong. Various geographic
segments are currently not availing the services of HSBC due to inconvenient branch
location or absence of neighborhood branches.
No Investment Products:
Currently, the personal banking division of HSBC does not have investment products
for its customers. Banning of investment loan by central bank posses a strong pressure
to design new products.
Opportunities:
Countrywide Network:
The ultimate goal of HSBC is to expand its operations all over Bangladesh. Nurturing
this type of vision & mission & to act as required, will not only increase HSBCs
profitability but also will secure its existence in the log run.
Diversification:
HSBC can peruse a diversification strategy in expanding its current line of business.
The management can consider options of starting merchant banking or diversify in to
leasing and insurance. As HSBC is one of the leading providers of all financial
services, in Bangladesh it can also offer these services.
Credit Cards:
This is one of the most popular and emerging products in Bangladesh, which offers
customers total financial mobility. Various other banks and institutions are currently
offering this product. HSBC can also take advantage of this product and grab the
market share.
Acquisition:
HSBC is one of the experts in acquiring various firms and organizations. In Bangladesh
it can also diversify quickly by acquiring various local established banks and
increase its total operation within Bangladesh rapidly.
Threats:
Upcoming Banks:
The upcoming private local & multinational banks posses a serious threat to the
existing banking networks of HSBC. It is expected that in the next few years more
commercial banks will emerge. If that happens the intensity of competition will rise
further and banks will have to develop strategies to compete against and win the battle
of banks.
Losing Customers:
Absence of various products such as credit card, housing loans is causing various
customers to detract from HSBC. This is a serious threat for HSBC Bangladesh.
Default Culture:
This is a major problem in Bangladesh. As HSBC is a very new organization the
problem of non-performing loans or default loans is very minimum or insignificant.
However, as the bank becomes older this problem will arise enormously and the bank
may find itself in a more threatening environment. Thus HSBC has to remain vigilant
about this problem so that proactive strategies are taken to minimize this problem.
Chapter 10: Work Experience at HSBC
Headquartered in London, HSBC is considered as one of the largest banking and
financial services organization in the world. In Bangladesh it has made its place as the
fastest growing bank. Being able to work in this world-renowned organization I find
myself lucky. I got the opportunity to work in Personal Financial Service- MIS
(Management Information) department of HSBC Bangladesh, DAK main branch.
During the three months of my internship I was placed in the PFS MIS department of
HSCB, DAK office under the direct supervision of Mr. Kamruzzaman Mamun, Credit
Manager of Personal Financial Services. I heavily enjoyed the work of this department.
The work experience gave me a good idea of the overall banking system of Bangladesh
and taught me the professionalism at work place.
During the internship at DAK office, I was placed in the Management Information
System (MIS) department and my prime responsibility was to maintain the database of
existing customers and enter new applicants data in central database as well as analysis
of data and generates different kinds of reports for the bank and Bangladesh Bank.
During this period I learned various aspects of loan assessment criteria, customers
nature etc. Also learnt about the various products and services of the company. Direct
intervention with the customers database helped me a lot in preparing my project. A
brief description of my job duties at PFS CCR MIS at HSBC are given below:
So these were some of the experiences I have gained during my internship at HSBC
gave me clear understanding of the Central database maintenance and the personal
banking system of HSBC.
Chapter 11: Credit Assessment Criteria
Based on various criteria approval officers approve or reject the loans. First of all, they
see whether the applicant fulfils the parameters set by HSBC and the central bank.
Thereafter, they follow the rules set by the bank to assess the applications. If any
document is not provided with the application the approval officers place discrepancy,
which is updated in the database, and the MSOs are informed about the discrepancies
through loan update and make proper adjustment. Approval officers recommend the
applications to be approved or rejected or dropped after assessment. After that
applications are sent to the credit manager for reviewing and signing the documents
before forwarded to MIS for update.
Approved Loan:
Applications signed by the credit manager forwarded to MIS for updating loan status in
the database. After status is updated the application is forwarded to Operation
department. Operation staffs check whether all docs (CIB, TIN, Loan set-off form,
undated cheques) are in order. Moreover sign on irrevocable letter of authority and
demand promissory note are also checked. If everything is in order then the loan is
disbursed means money is transferred to the applicants account. As operation officers
after disbursement assign a serial number and forward the applications to the MIS to
update the disbursement input. If the file lacks in any document then it is kept
separately until the discrepancy is updated (special cases).
Assessment
A person with high net worth is considered as a good candidate for loan. When a loan is
backed by property (Flat, Car) the approval officers find the loan easy and secure to
assess. In case of secured loan, mostly the security matters. At HSBC the Personal
MIS
secured loan securities like Protirakkha Sanchaypatra, WEDB (Wage Earners Bond),
USDB (US Bond), and TMD (Term Deposits) are needed to be lien with the bank.
Applications with Approved Applications are
Discrepancy are informed to forwarded to Operation
MSO by Daily
Before Loan Update
sanctioning Department
loan the credit officers carefully for Disbursement
analyze whether the customer
(Lotus Notes)
would be able to pay out the credit when due, with a comfortable margin of error. Six
aspects of loan application usually determine this. They are character, capacity, cash,
Rejected,
collateral, condition and control. AllDropped, Deferred
these factors should be taken into consideration
Applications are sent to
before approving a loan. Central Storage
Character:
The approval officer wants to know about the purpose of the loan first. They must be
convinced that the customer has a well-defined purpose for requesting bank credit and
serious intention to repay. If the officer is not sure exactly why the customer is applying
for the loan, he may ask for the clarification and comfort ness of bank. Once the
purpose is known, the approval officers must determine whether it is consistent with the
banks current loan policy.
Every loan application form of HSBC bank consist a blank area to be filled by the
customer/ borrower describing the purpose of the loan. If any kind of inconsistency
arises the approval officers have the right to ask for the proper explanation to the MSO
or even to the customers.
Capacity:
The approval officers make sure that the customer has the legal eligibility for
requesting the loan and the legal standing to sign a binding loan agreement. In HSBC
has a parameter like the minors (age below 18 yrs) as well as the people exceeding the
age limit 55 yrs would not be eligible for a loan. At the same time in case of corporate
clients the approval officers make sure that the representative from a corporation asking
for loan has the proper authority from the companys board of directors to negotiate a
loan and sign the loan agreement binding the corporation. In case of partnership
business, the approval officer might ask to see the firms partnership agreement to
determine which individuals are authorized to borrow the firm. A loan agreement
signed by unauthorized persons can be stated as uncollectible, insecure and therefore
result in substantial losses for the bank.
Cash:
While assessing the loans the approval officers concentrate mainly on the borrowers
ability to generate cash flow either from business or from salary or other income. At
HSBC, the bank statements are considered as the proof of income. There is always a
high chance that the loan application of a borrower with a strong bank statement
(inflow to the bank account) will be approved by the credit department of the Bank. In
case of unsecured loan, since no security is kept against the loan taken by the
borrowers, their ability to generate cash flow becomes the main consideration of loan
assessment.
Collateral:
Like cash inflow collateral is also important to support loan request. A person with
high net worth is considered as a good candidate for a loan. When a loan is backed by
some property the approval officers find the loan easy to make. In case of secured loan,
the security matters mostly. At HSBC the Personal secured loans are need to be backed
by the government bonds. Other requirements are negligible in this case.
Condition:
The approval officer and credit analyst must be aware of recent trends in the borrowers
line of work or industry and how changing economic conditions might affect the loan.
For instance, at HSBC the approval officers are not very interested to entertain the
businesspeople from garments industry and buying house business since, both of these
interrelated businesses are vulnerable in nature and under uncertainty. Though the
papers (bank statement and tax papers) appear to be strong at present these might turn
into weak in near future.
Control:
The bank wants to have control on the credit they have made to their customers. The
bank watches on whether law and regulation could adversely affect the borrower. At the
same time the bank sees whether the loan request meets the banks and regulatory
authorities standards for loan quality. For example, previously HSBC bank used to
give Investment Loan to the borrowers so that the borrowers can use that money to
invest on government bond at a high interest rate. However, Bangladesh government
has made the decision that no loan should be made for investing the loan amount to the
government bond. Therefore, HSBC stopped the Investment Loan scheme and is
making alternative loan products.
At HSBC, the approval officers do not sanction the amount applied for in all the cases.
What the approval officers do is that, they analyze the financial need and capability of
the borrower and carefully determine the amount the customer is capable to repay to the
bank. In addition, HSBC has prepared a flexible repayment schedule of three, four and
five years in which borrowers repay the loan through equal monthly installment.
Therefore, HSBC is not only sanctioning the loan to the potential clients but also it is
making sure that the borrowers able to serve the loan easily.
Chapter 12: Skip Customers Demography and Trend Analysis
Data regarding the Skip customers of HSBC shows that it still in a tolerable level but
showing a increasing tendency. The main reason is that some certain groups of
customers have been delinquent very often and skipping without any trace. According
to the Delinquency Cycles of HSBCs personal asset products, Skip customers are the
defaulters who have not paid EMI (Equal Monthly Installment) regularly and its not
possible to collect or repayment of overdue amount from the customers. Moreover,
once a borrower is conserved as a Skip or default customer, cheques are bounced
rendering the borrower criminally liable, legal notice served of defaulter to repay;
failing this an arrest warrant/summons is issued by the court. Finally, on failure to
repayment, those account are written off with due approval of from Manager PFS or
Manger CRM. Analyzing the nature of skip customers of personal asset products will
reveal whether there is any natural tendency among the skip customers or if there is any
correlation among them. Moreover, analysis will help to find out the steps that should
be taken to control or bring the skip customers tendency at a nominal level
In-depth interviews were conducted with credit collection officers of the department of
CCR of PFS since they are responsible to follow up customers for repaying their loans.
In detail conversation with them, eight groups have been sorted out based on skip
customers characteristics.
12.2 Skip Customers Nature
TRA - Traceless:
Customers having invalid contact no, false references and false addresses are included
in this group. Therefore, collection officers cannot contact them and force them to pay
off the loan.
STC- Shifted to other Country:
Customers have intentionally escaped or permanently shifted to other country without
informing the bank as well as not paying the overdue of the loan. In this situation after
taking every possible step to contact customers, the loan is written-off from the book
and defined as bad and loss. But bank take legal action like filing case against the skip
customers.
OTH - Others:
Customers who have other reasons like serious illness, address change, family crisis,
temporary financial problem etc. are included in this group.
From the analysis we can see that about 42% of total Skip customers are having loan
over-burden problems, 4% customers are intentional defaulters, 6% customers are not
paying due to job-switching or 11% of are job-less. 27% customers are totally traceless;
therefore payments are not coming from them. Finally, 4% customers skipped as they
move to another country without repaying the loan. Some of them found fraud (6%) or
having other problems like illness, financial crisis or have passed away.
From the above table, it is found that 92% of skip customers have taken personal
installment loan and 8% have taken car loan. The ratio of skip customers of car loan is
very low since the vehicle; insurance and registration documentation are held as the
security against the loan. If a customer reaches to Grade-6, collection officers initiate
the repossession proceedings. Besides, it is noteworthy that there are no skip customers
of personal secured credit and personal secured credit since these loans are given
against the bonds. Normally the security is encashed if the customer misses three
consecutive EMIs. Since the apartment, property insurance and documents are held as
security in the case of home loan, there is no skip customer of home loan.
It is found that only 15% of total skip customers are having CEPS/AutoPay
background. Since Autopay customers salary is deposited in HSBCs account, their
chances of becoming delinquent are very low. In addition, customers with CEPS
background are from high-profile companies. Their loan repayment behavior has been
good over the years.
Nature of CEPS/AUTOPAY %
Customers
LOB 5 8
IND 4 7
JOC 15 25
JOL 7 12
TRA 8 1
STC 10 17
FRA 6 10
Other 4 7
Total 59 100
It is found that, Opex Group have been producing highest no (5) of skip customers and
in the second place Dhaka Sheraton Hotel, British American Tobacco, Pathfinder
Development Bd Ltd have been producing the second (3) number of delinquent
customers. From interview with collection officers, it is found that those customers are
lower level employees (mainly chefs and waiters) but receive high salary (16,000-
25,000/=). They dont have higher education, which is a major reason for unwillingness
to pay off loans. Besides, some of them have loans with other banks or they are
intentional defaulter. Whenever they get salary, they are more interested in meeting
other commitments, family needs etc but not in paying loan installments. Collection
officers have found them very problematic and commitment- breaker.
These reasons are applicable for KAFCOs (2) employees also. Though, they get
handsome salary but they are over-burdened with other loans, which create problems in
paying loan installments.
Next, Beximco Textile Ltd (2) and Youngone (CEPZ) Ltd (2) are other riskier
companies in terms of having delinquent customers. As Beximco Textile Ltd is not a
financially strong and profitable company, they do not pay their employees regularly.
They pay them once in every 3-4 months, which create problems for a customer in
paying loan installments.
Besides, in Youngone (CEPZ) Ltd, the ratio of job-left and job-switch cases are high.
More over, this company doesnt pay its employees regularly also. Therefore, there are
some delinquent customers of this company. The Ratio of rest of the companies can be
ignored but have to be monitored closely as applicants from these companies might
give a significant rise in skip customers trend.
From the above table, it is found that 10% of total Skip customers own or work in
garment factories; dying, knitting and packaging industries or fabrics manufacturing
companies. It has been observed that, people, working in this sector are more likely to
change the job, leave the job due to irregular salary payment from the employer.
Therefore, this sector can be considered risky in giving loans.
There are about 6% skip customers in Pharmaceutical sector. From interview with
credit collection officers, it is found that, most of the people, working in pharmaceutical
companies, are sales officers. Their salary is mainly commission-based. When they fail
to reaches their sales-target, assigned by their companies, they dont get commissions.
Therefore, they face serious problems in paying loan installments.
There are 4% skip customers in dying, knitting, and packaging sector. In this sector, the
practice of job change is very apparent. Moreover it is a sensitive sector, which
fluctuates simultaneously with market-demand. Some the owners, who have taken loan
from HSBC, became skip customer due to financial instability of the firm. Another
analysis, it is found that people, who work in hotel sector, do not have good record in
loan repayment, too. Skip customers rate in this sector is like 6%, due to dependability
on the market demand heavily. Other risky sectors are Developer and Construction
suppliers sector (6%), Buying/Trading Houses (6%) etc.
People, who work in developing and construction businesses, always having shortage
of cash in hand. Whenever they get money they invest in the business as soon as
possible. Therefore, they often fail to pay loan installment due to crisis of liquid
money. The ratio of leaving job or job mobility is high in trading and marketing
business. Moreover, people who work in this sector often hide their actual salary and
avail the loan by showing their salary much higher. In addition, these people work in
sales department. Their fixed salary is very low. They totally depend on sales-
commission. Therefore, it is hard for them to pay loan installment when they are in a
bad situation.
In the ticketing and shipping cargo sector, is another sector where the rate of skip
customers is about 4%. Primary reason for this we say about their income level which
is not high and commission based. They are over-burdened with other loans taken from
either friends or from other banks. Therefore, they often face financial problem or
others difficulties in paying loan installments when there is downtrend in RMG,
construction, food supply business. Because these are the business that uses the cargo
service mostly.
Besides, some businessmen have become hardcore defaulters who work in buying or
trading companies. Usually, those buying houses financial stability have been very
poor and some of them are losing businesses. Showing false salary to avail the loan is
also a common practice in this sector. In addition, in some cases, it is found that, some
customers have taken loans by showing ownership of buying houses, though that house
does not exist at all. Moreover, some trading houses owner have availed loan by
representing false documents and information.
Finally, other risky sectors are- real estate business, cigarette manufacturing and
marketing etc. The ratio of rest of the sectors can be ignored as they have very
negligible percentage of total delinquent accounts.
Monthly Income No of %
Customers
15000-25000 tk. 12 38
36000-45000 tk. 8 25
26000-35000 tk. 7 22
45000(+) 5 16
Total 32 100.00
Age No of %
Customers
25-30Years 15 47
31-40Years 9 28
41(+) Years 8 25
Total 32 100.00
It is found that, 47% of total skip customers are due to loan over burden is from 25-35
years age group, 38% customers monthly income range is 15000-25000 tk, 28%
customers service tenure is between 2-3 years. 28% of total skip customers are due to
loan over burden is from 31-40 years age group, 25% customers monthly income range
is 36000-45000 tk, 16% customers service tenure is between 3-5 years. We can find a
trend from the analysis that those who are working more than 7 yrs in a company
within income range of 15000 25000 tk are overburdened more than other categories.
Analysis implies that, most of the LOB customers work experience and income level is
not very high. Moreover, they are from young age group. From interview with the
collection officers, it is found that, in most of the cases, customer deliberately
concealed the actual purpose for taking the loan and used vague terms like Purchasing
household appliances, Personal expenditure etc. Most of these customers have
personal loans with other banks or with their friends and relatives and taken loan from
HSBC just to repay those loans. Moreover, they provided misinformation regarding
their monthly income and expenditure to lower the DB ratio. For providing false
contact number and references it was not possible for the collection team to locate or
contact them.
Intentional Defaulter:
Service Tenure No of %
Customers
3 (+) Years 4 67
2-3 Years 2 33
Total 6 100.00
Monthly Income No of %
Customers
25000 (+) tk. 5 83
15000-25000 tk. 1 17
Total 6 100.00
Age No of %
Customers
36-45 Years 3 50
25-35 Years 3 50
Total 6 100.00
It is found that, 67% of total IND customers have more than 3 years work experience,
83% earn more than 25000/=, 50% belong to 36-45 age group- usually all these ratio
are considered as strength for a customer. However, IND customers have taken loans
using this strength. Even they have provided valid phone numbers, addresses and
references, but later on they found as hardcore defaulters and skipped as well. Though
having the ability to pay off the loan, they are totally unconscious about payment and
they took loan without having the intention to repay.
Job Changed:
Service Tenure No of Customers %
2-3 Years 2 50
3 (+) Years 2 50
Total 4 100.00
Age No of Customers %
25-35 Years 3 75
36-45 Years 1 25
Total 4 100.00
From the analysis, it evident that 50% of total JOC customers have 2-3 years work
experience, 75% earn from 15000 to 25000/= and 75% belong to 25-35 age group. It
seems that, the trend of job switching is high in young age group. Therefore, their
service tenure is not too long. Besides, 15000 -25000/=, this income group have
tendency to change job to get more salary. However, some of them have found that they
are receiving lower salary or irregular salary in the new job than before. As a result,
they are not paying loan installments. Some of them have availed loan by applying as
service-holders, which are actually small businessmen. They do this just to avoid
providing authenticated tax paper. It has been observed that people working in
pharmaceuticals, trading -buying houses, insurance companies, advertising and media
companies and construction supply have higher tendency of job change.
Job Less:
Service Tenure No of %
Customers
2-3 Years 6 75
3(+) Years 2 25
Total 8 100.00
Monthly Income No of %
Customers
15000-25000 tk. 5 63
25000(+) tk. 3 37
Total 8 100.00
Age No of %
Customers
25-35 Years 4 50
36-45 Years 3 38
45(+) Years 1 12
Total 8 100.00
It is found that, 75% of total JOL customers have 2-3 years work experience, 63% earn
from 15000 25000 tk and 50% belong to 25-35 age groups. The characteristics of
JOL customers are more or less similar to JOCs characteristics. It has been found that
people working in different types of buying house, constructions supply business,
computer education centers, courier services, internet service providers (ISPs) and
RMG sectors, have higher tendency of leaving or switching to another job.
Traceless:
Monthly Income No of %
Customers
15000-25000 tk. 10 50.00
45000 (+) tk 6 30
26000-35000 tk. 3 15
36000-45000 tk. 1 5
Total 20 100.00
Age No of %
Customers
25-35 Years 12 60
45(+) Years 5 25
36-45 Years 3 15
Total 20 100.00
In this analysis it is evident that 50% of total TRA customers earn from 15000 to 25000
tk and 64% belong to 25-35 age groups. It is worth mentioning that most of TRA
customers are young and earning minimum salary to avail a loan. From interview with
the collection officers, it is found that some of TRA customers permanently left the
country. Some of them have left the job without notifying both employer and the bank.
Some of them have provided false phone number and references or addresses. So it is
too tough to contact them. Therefore, they are totally out of sight of the collection
department and considered as skip customers.
Monthly Income No of %
Customers
25000-35000 tk. 5 71
35000(+) tk. 2 29
Total 7 100.00
Age No of %
Customers
25-35 Years 5 71
36-45 Years 2 29
Total 7 100.00
It is found that, 57% of total SAL customers have 2-3 years work experience, 71% earn
from 25000 to 35000/= and 71% belong to 25-35 age group. It seems that SAL
customers earn handsome amount of money though having service tenure not too long.
Actually, they have availed loans by providing false salary statement, which is much
higher than original. In other cases, some companies like garments manufacturing
organizations pay their employees irregularly, which make them incapable to pay loan
installments.
Fraud Activities:
Service Tenure No of Customers %
Less than 3 Years 3 75
3(+) Years 1 25
Total 4 100.00
Age No of Customers %
25-35 Years 2 67
36-45 Years 2 23
Total 3 100.00
It is found that, 75% of total fraud category customers have less than 3 years work
experience, all of them earn from 25000 to 35000 tk and 67% belong to 25-35 yrs age
group. It is significant that FRA customers do not have long work experience and
consists of young aged people. Some of them provided misinformation regarding their
employer or business concern. Post approval verification revealed that these customers
mentioned business concerned does not at all have any existence. In most cases, the
applicant mentioned their friends and colleagues as immediate relatives and cousins.
Besides, some of them have provided false tax paper, LOI etc. Actually, they have
taken loan from other banks also by using same techniques, for which they can be
considered as professionals. So it is quite evident that these types of customers had no
intention to repay the loan from the very beginning and intentionally skipped.
Others:
This group contains different types of customer like those who are temporarily job less,
having financial problem, sudden death, family crisis, illness etc. A customer may be
skipped for these various reasons. Since this group contains very few accounts, the
analysis in terms of age, income and service tenure is not done for this group. But
measures should be taken to keep this group under control.
42% of total Skip customers are not paying loan installments due to having loan
overburden problems. Either they have loan with other banks or they have taken
loan from their friends and relatives. They are incapable of paying off these
loans since their income have been remaining same. So they have a good
reason to be skipped.
25% of total Skip customers are not paying for either they have changed their
previous jobs or currently they are job less. People, who have changed job, are
not paying loan installment since they are receiving lower salary than before.
Job less people is not paying because at present they have no source of income.
4% of total Skip customers are intentional defaulters. They are not paying
without any valid reason though they are capable enough. Form the interview of
the collection officers it has come out that most of them have strong political
backup and used the political influence to sanction the loan. This kind of cases
the bank has not much to do even though anticipating subsequent risk is
involved.
The rest of the customers (27%) are not paying for different reasons like
collection officers cannot contact them, customers have moved to another
country permanently, some of them found fraud and some of them are facing
salary problems or they are facing other problems.
Among five asset-products, Personal Instalment Loans (PIL) has been facing
about all of the Skip customers. This is because, no invoice, quotation, personal
guarantee or cash security are required for these loans. Even no down payment
is required to disburse this loan.
Most of the LOB customers are taking loans by hiding their other loan details,
deliberately mentioning higher salary, providing false address and references,
contact numbers, showing very less expenditure and hiding the original purpose
of taking loans. In some cases skip customers take favor of some fraud officers
to conceal their actual designation, salary, date of joining in LOI (Letter of
introduction) to make the sanction of the loan reasonable.
Most of the IND customers have more than 3 years work experience, earn more
than 25000/= and belong to 36-45 age group- usually all these ratio are
considered as strength for a customer. However, IND customers have taken a
loan using these strengths both political and social. Though having these
strengths, they are totally unconscious about repayment and become traceless
after taking the loan.
It has been found that people working in different types of project (UN, CARE
etc), computer education centers, courier companies, internet service providers
(ISPs) and garments sectors, have higher tendency of leaving job.
A certain group of people have availed loans by providing false phone number
and references or addresses. Another group provided misinformation regarding
their employers or business concerns. Post approval verification revealed that
these customers mentioned business concerned does not have any existence at
all. In most cases, the applicant mentioned their friends and colleagues as
immediate relatives and cousins. Besides, some of them have provided false tax
paper, LOI etc.
It is also found that, most of the SAL customers have 2- 3 years work
experience, earn from 25,000 to 35,000 tk and belong to 25-35 yrs age group. It
seems that SAL customers earn handsome amount of money though having
service tenure not too long. Actually, they have availed loans by providing false
salary statement, which is much higher than original with the help of some
officers. In addition, some companies like garments manufacturing companies,
buying house, hotel services, construction and supply business pay their
employees irregularly which make them incapable to pay loan installments. In
the future these type of customer become skip customers.
Chapter 13: Recommendations
Based on the findings following recommendations are provided:
To minimize the risk of having FRA and TRA customers, all the applicants
preferably should have land phone (PABX not applicable) and the concerned
people must verify all the contact phone numbers. References must be
immediate relatives and verified over phone before approvals. Customers
address and other information must be also be verified by the concerned people.
Personal instalment loan may be taken for any purpose but should be specific
and clearly stated in the application. The bank may ask for quotation in case of
CAR loan. In addition, the loan fund should be disbursed favoring the vendor
for specific purposes on a case-to-case basis. This will protect the misuse of
funds.
Management should carefully handle the loan application from some particular
companies and sectors that have been producing skip and delinquent customers.
Application received from the risky sectors should be verified carefully and
more authentications should be created to assess those particular applications.
Loan applications from customers from young age group, having shorter service
tenure and lower income level, should be carefully assess
Another important thing is that HSBC should make the CIB (Credit
information Bureau) report mandatory for every sort of applicants. This report
provided by Bangladesh Bank will create more transparency about the comers,
reveal the past repayment record of loan facility from other banks, applicants
credit worthiness, integrity level would be verified by this report. Making CIB
report mandatory for the applicant I think the tendency of skip customers will
be reduced to a subsequent level.
Collection efforts should be given more emphasized to ask the customers make
the repayment regularly. Customers with due of 1 and 2 payments should be
monitored carefully and prevent them to from reaching the in due 3 category.
Legal actions taken against the skip and delinquent customers should be
strengthen to discourage the applicants becoming delinquent or skip customers.
Sales team can play an important role in reducing skip customers. Avoiding
risky sectors as well as giving importance to banks interests and profits will
persuade them to bring good customers and help to reduce the skip tendency at
a tolerant level.
Finally, the management should strictly follow group policy before proceeding
for any loan application.
Locker Services:
While interacting with the customers at customer service point a huge amount of
customers demanded lockers services. With such demand of this service, HSBC should
consider of proving locker services to its customers. This will also attract new
customers from other banks who are currently offering this service.
Employee Trainings:
Employee trainings and workshops should be administered in order to give them
knowledge and professionalism of customer interactions. With more professional base
employees can better satisfy the customers. They should be taught about how to deal
with problem customers and how to deal problematic situations. Employees-
specifically sales officers should be conscious and taught about the financial aspects of
the loans so that it becomes convenient for the approval officers to assess loans.
From the trend analysis of Asset Utilization Ratio, it has been found that the ratio has
got a decreasing trend in 2004. This means that asset is not being utilized properly.
HSBC should take appropriate actions in order to utilize it assets properly.
Cost Control:
In order to improve the Net Interest Margin and Net Operating margin, HSBC will have
to focus on every element of operating and non-operating expense. If the bank can
reduce the cost, it will result in the improved margins.
Case Study: 1
Missing File
Problem Statement: Some times due to misplacement or faulty maintenance of data in
the database, or not on time delivery update of the file is not delivered to the approval
officers or to operation on a timely manner. Or the file simply goes missing without any
trace.
Action:
Procedures to follow in this kind of situations:-
First task is to make sure that the file was actually received at our
end by tracing it in the Intransit Mail tracker.
If not received on any tracker then we must inform the introducer
about the fact that we have not received the file yet. Else if we have
received the file then we must follow the later procedures.
Then ask all the Approval officers one by one about the file (as
some times they have to receive the file directly for some high
graded customers due to top managements decision)
If the second phase is also a failure then we have to go for extensive
search in all the cabinets and storage facility where the files from the
said date on which the file was received, are stored.
If the file is still missing then we have to inform the introducer for
the last resort for this kind of problem, re-apply for the loan (this is
not encouraged).
Recommendation:
Arousal of this kind of situation is not unexpected as the volume of the files processed
each day is on the increasing trend. Due to shortage of the space and improper storage
facility this might happen. But the officer in charge has to be extra careful to reduce the
margin of error as low as possible. If the file is not found then there is a possibility that
the officer in charge might feel panic, but there is no need to panic but they must be
careful that the error rate in data maintenance goes down significantly.
Case Study: 2
Problem Statement: Some times due to misspelling or some other types of technical
faults the cheques are returned to the customer for new issuance of Cheque.
Action:
Procedures to follow in this kind of situations:
Perform maintenance (discrepancy) on the database that the Cheque
needs to be replaced.
The introducer gets the information by the next loan update.
Then the introducer arranges for new Cheque with all after
technicality measurements is met.
During this time the file stays with the Operations Department for
the replaced cheque, on receipt of which the fund will be disbursed.
After the cheque is received MIS is responsible for delivering the
cheque to the operations department.
Recommendation:
If the introducers become little more cautious then this kind of problems can be
avoided very easily. As more or less the majority potion of the Cheque replacement
problems are due to the amount or simple spelling mistakes. Being a little more
cautious they can avoid this kind of situations by carefully filling up the required fields.
Case Study: 4
Case Study: 5
Case Study: 6
Recommendation:
Development of personal level relationship is the key to deal with this kind of
situations. But the involvement and acknowledgement from the top management has to
be there. If the top management wants to deal with the matter in a formal way then they
should be involved. If they want the matter to be solved at the root level from where the
problem has arisen then in most of the cases the in charge officer is dealing with the
problem. Here the Service Level Agreement (SLA) comes in handy.
Case Study: 7
Case Study: 9
Customer letter regarding the reschedule, reduce interest, or set off loan
Problem Statement: Some times customers come with many kind of request like
rescheduling of installment, reducing interest rate, or loan set off.
Action:
Procedures to follow in this kind of situations:
The Operations Department is informed about this kind of
applications arrives to the MIS.
Operations Department perform the required maintenance the
request if it feasible.
Recommendation:
The respective branch should handle this kind of requests or application so that the
customers can be sure about whether it is possible to perform the reschedule or change
of interest rate. Here both customers and operation time will be saved.
Case Study: 11
Case Study: 12
HUB Problem
Problem Statement: Some times the HUB system fails. Also this has been a major
problem that the network is not providing ample support, the computers are not
providing service of the expectation level and the printing (Hardware) systems are not
of the standard and quality.
Action:
Procedures to follow in this kind of situations:
Inform the IT Department with the detailed information about the
error to get the best support from them
Stop working on the problematic computer until the IT support is
available.
Recommendation:
Inform the IT for any kind of problem with the computer or the network. This has not
been a standard practice to troubleshoot the system by the user only. There is a great
advantage of this kind of standard practices. The IT is solely responsible for all sort of
maintenance, as a trouble shooter gives them the edge as they have the idea what can be
the problem with system, because all the systems are almost of the same category with
similar software installed on it. Employees should be given a short overview about the
problem that arises and possible solution. This might save valuable time and data.
Case Study: 13
Action:
Procedures to follow in this kind of situations:
Inform the introducer about the matter
The introducer then informs the customer to deposit some fund in
the account.
As soon as the funds are available the loan is disbursed.
Recommendation:
This kind of situation can be easily handled or reduced if the introducer of the loan
informs the customers about the fees or charges well before the disbursement. Or the
introducers can inform their respective customers as soon as they come to know that
the loan has been approved.
Case Study: 14
Disbursed in Different Account
Problem statement: One day a customer called the credit department and told that
the sales officer informed him that his loan application was approved on a certain date.
But even after the approval the loan was not disbursed to his account. And when the
sales officer checked the database, he did not find any discrepancies regarding the loan
application. What was the problem then?
Action:
After the objection, the operations department was looking for the cause of not
disbursement. After checking the system it was found that the loan amount had been
disbursed to another account. And it happened due to wrong debit authority number,
which was written by the sales officer in the application. Partially the operation
department was also liable for this mistake because before disbursement it was
operation departments duty to check all the necessary points of the applications for the
fund transfer. If the checking was done carefully, then it would have come out that the
applicants master account number does not match the debit authority number. Right
after the problem identification, it was checked in the system whether the account
holder had withdrawn the disbursed money or not. Luckily the account holder did not
withdraw the money and a hold instruction was given on the system to hold the account
for some period. After that the fund was transferred to the applicants account.
Recommendation:
The checking should be done very minutely and carefully. It should be done in such a
way that a single point of checking couldnt be missed in any cases. The respective
executives and officers should give more attention while doing the disbursement and
fund transfer respectively.
Case Study: 15
Recommendation:
While assessing a loan application applicants business condition, integrity, credit
worthiness etc should be checked very carefully.
As the services improved workflow of the banks has been changed dynamically as
well. Banks use more sophisticated ways to assess loans. Quick assessment process
pressurizes the loan officers to use sophisticated ways of loan assessment. Though
HSBC use its own investigation along with third party investigation for loan
assessment the whole procedure may be developed furthermore. Central bank may
become more helpful by providing helps like hosting database (about customers) on the
net.
Internship Report
Prepare For
Dr. .M N Sirker
Register & Intern Supervisor of Asian University of Bangladesh
Prepared By