Payroll Banking of Standard Chartered Bank Limited

Payroll Banking of Standard Chartered Bank Limited

Payroll Management is the administration of the financial record of employees’ salaries, wages, bonuses, net pay, allowances and deductions. Payroll involves the calculation of amounts due to the employees, such as hourly wages, a salary consists of a certain amount per calendar period, or pay to salespersons on commission, as well as reimbursement for employee-paid expenses such as travel, medical, education. The payroll management service has become a vital part of any company to satisfy its employees. Many banks now offer payroll processing services. It is user-friendly, gainful, highly secured, less expensive, easier to get loans, and it takes less time to see all information in one website when payroll accounts are opened in a bank. But it is a matter of taking decision on whether to choose a bank for payroll service or a large specialized firm. In Bangladesh, several banks are offering payroll services for the employees working in different organizations. Having been considered Standard Chartered Bank is one of few banks which offer a comprehensive set of benefits and services to keep employees satisfied with their workplace. The bank is not only the leading foreign bank of the country but also one of the few banks that have revolutionized the banking service industry through adoption of modern technology and process with a view to enhancing customer satisfaction. Payroll Management Services is one of such technological advancements which are comprised of salary accounts, interest rate on salary amount, loan facilities, credit card shopping and debit cards, alternate banking etc. The popularity of payroll specialized services has been increasing since its initiation in this country as a great number of companies have already been registered with the bank and many more are coming up.

Introduction:

In today’s world there is a saying, “The biggest thrill wasn’t in winning on Sunday but in meeting the payroll on Monday”. Payroll Management is the administration of the financial record of employees’ salaries, wages, bonuses, net pay, allowances and deductions. Payroll involves the calculation of amounts due to the employees, such as hourly wages, a salary consists of a certain amount per calendar period, or pay to salespersons on commission, as well as reimbursement for employee-paid expenses such as travel, medical, education. The payroll management service has become a vital part of any company to satisfy its employees. Many banks now offer payroll processing services. It is user-friendly, gainful, highly secured, less expensive, easier to get loans, and it takes less time to see all information in one website when payroll accounts areopened in a bank. But it is a matter of taking decision on whether to choose a bank for payroll service or a large specialized firm. In Bangladesh, several banks are offering payroll services for the employees working in different organizations. Having been considered Standard Chartered Bank is one of few banks which offer a comprehensive set of benefits and services to keep employees satisfied with their workplace. The bank is not only the leading foreign bank of the country but also one of the few banks that have revolutionized the banking service industry through adoption of modern technology and process with a view to enhancing customer satisfaction. Payroll Management Services is one of such technological advancements which are comprised of salary accounts, interest rate on salary amount, loan facilities, credit card shopping and debit cards, alternate banking etc. The popularity of payroll specialized services has been increasing since its initiation in this country as a great number of companies have already been registered with the bank and many more are coming up.

Standard Chartered Bank

Standard Chartered Bank is a 150 -year’s old bank headquartered in UK and operating in more than 70 countries in the world. It has a 100-year‟s history of banking in Bangladesh. Today the bank is not only the leading foreign commercial bank but also a bank with superior quality services. It was in 1948 in the then East Pakistan Period the bank started its operation in Chittagong city. After a long fifty years of operation in 2000 it acquired ANZ Grindlay’s Bank and later on took over American Express Bank‟s shares in 2006. Thus it has become the largest foreign bank in this country with 26 branches in 6 cities, 84 ATMs, 16 Financial Kiosks and employing over 1300 people. Currently, it provides Consumer Banking, Wholesale Banking, SME Banking, and Islamic Banking which ranges from Personal & Corporate Banking to Institutional Banking. Over the years it has gathered extensive knowledge on local market and economy as a whole. It is also upgrading newest technology and security systems with greater privacy over third party invaders. One such example of their efforts to stick towards changes in technology is the Phone banking, I-banking, e-Lending services offered to clients. The bank is also committed to the society and its “Seeing is Believing” campaign shows their commitment in eye-care to the unprivileged people of Bangladesh as a part of CSR activities. At Standard Chartered, they are committed to be here for people, here for progress, and here for the long run – “Here for good”.

Deposit Management & Employee Baking

This department is one of the functional areas of consumer banking division. One of the main functions of banks is to accept deposit level from the surplus unit. Deposits may be fixed, saving and current etc. Deposit Management works for making sure that it will be able to repay the deposits to the respective customers when they claim for it. Payroll Banking is another activity of this department which deals with employee salary accounts to grow deposit. It has unique features based on the personalized banking services by offering superior-value-proposition. Today Payroll is no longer a term for this bank. The name has been changed to Employee Banking from Payroll Banking with a view to having similar team name around the world.

Together the department helps grow the overall deposit base in order to provide loan services. The Payroll Banking is being changed continuously to serve the enlisted companies. The companies can rely on their service quality once the employee accounts get opened. In today’s economic set up there is nothing like a bank’s service to manage salaries. In fact it is a great way for the employers to keep their employees satisfied and motivated.

Literature Survey

The internship report titled “Payroll Management Services of SCB” is a unique topic to work on since in Bangladesh no such article or report was written and published previously. It is the first time for a student to work on Payroll Service provided by this renowned multi-national bank.

After a careful and meticulous study on Payroll Service it was found out that mostly large firms are offering this service worldwide. A few banks in Bangladesh is offering payroll. Mainly the convenience for a customer is not to visit a firm for the maintenance of salary amount. A bank on the other hand is specialized in deposit management which includes interest rates on salary accounts, loans on it, credit cards and debit cards etc. The report is written in details covering each and every product that can be availed by opening a payroll account with SCB. What is found out after doing literature survey in the BRAC University Online Library Database is discussed below:

Article 1: Bank of America Offers Online Payroll Service

Gurliacci, D (2006) wrote an article on online payroll service provided by Bank of America. The bank started its operation in June, 2006. The service is applicable for a company who has maximum 20 employees. Mainly, the service is free if the pay cheques of all employees are deposited directly into the bank but charged $5.00 if he has not any account with that bank. If there are more than 20 employees and if they are not paid direct deposit to the bank account will be charged $2.00 to them. If a business has employees residing in more than one state, there is a $12 per month fee for each additional state. There is no need to download and install any software for this service. The bank will send email reminder when payroll is due. The service automatically enters voluntary deductions including health insurance premiums and retirement plan contributions calculate employer contributions as applicable. Bank of America offers $25 bonus for both the employers and employees who open a new “personal checking account” with them. There are tax deductions in the service also. The bank offers assistance by telephone and email as well as particularly helpful online chat option.

Article 2: Redding Bank of Commerce Announces Purchase of L& L Payroll Service

This California based bank has purchased L& L Payroll Service recently. The Payroll Service Provider was established in 1998 in Redding, California and has been offering complete payroll and labor cost management with direct deposit and online access to local small businesses with 1 to 100 employees. Since it has 13-year experience in payroll management services, Redding Bank has acquired the firm as its business partners. Now the bank offers a full line of payroll solutions for all size businesses including time and attendance programs, automatic tax services, free direct deposit, customized reporting, workers compensation tracking.

Article 3: Should You Be Doing Your Payroll Online?  

It is always effective to use small-business accounting software to manage payroll than to do it by hand. A company that is searching ways to operational efficiency should go for online service after considering the below mentioned factors:

Time

A company has to find out how much time it spends on payroll each week. Once online payroll is set up, the total time spent on payroll gets reduced to serve in a better way.

Minimal Need for Input

The set is very easy where it needs only a few numbers to get started.

Accuracy

There is no chance of error as long as all work hours per week and respective rates are given correctly.

Easy Reporting

Through this service an employer can know the payroll liabilities, overall cash position of the company.

Employee Access

Each employee is provided an account with user name and password via which he can have a view on payroll details of his job.

Article 4: Choosing a Payroll Service Provider

Basso, Robert (2001) in his article tagged for payroll suggested how to outsource payroll service and what to consider when a payroll service provider is to be selected. For many years payroll service providers have been offering more and more added features to payroll. The option to choose a firm to outsource this HR function is a matter of concern. The following questions needs to be answered in order to outsource payroll:

What is their track record?

In addition to conducting traditional methods of doing research, companies should review complaints and search for media coverage. Their past record is to be found out before selecting a payroll service firm.

Who are their clients?

A payroll service provider is judged on their client list. It brings a clear idea about that firm whether they can manage the same sized company well or not.

Are they keeping up with technology?

It is to be reviewed that the provider is keeping up newer technology. Up-to-date providers offer more adaptable, scalable software and data storage system to match.

Will they provide personalized attention?

Most companies want to know the personal financial information from any service. The best way to know is to look for client-to-service representative ratio and total number of Certified Payroll Professional (CPPs) on its staff. A good company will have 80% of customer service staff who are professionally certified.

Are they competitively priced?

A service provider which offers low rates today with a wide range of pricing schedule is lack of surviving for long run than a provider with expandable and scalable service with competitive rates.

Findings

Being a bank it is a different experience to do payroll banking than that of merely payroll service firm. A firm may have long years of experience in performing HR functions but is lack of managing salaries after making some proper investments in secure assets. It is very safe to keep salary in a bank deposit so that the return may be higher and with it bundled services can be provided to a company via salary accounts. Standard Chartered has been leading the payroll business of banks in the country since its initiation in 2004.

In contrast with BoA Online Payroll Service, SCB is sophisticatedly offering easy payroll service for absolutely free. The charge based on total number of employees is excluded here. The alternate business modes like SMS Banking, Online Banking all are free of charge. To compare it can be said online banking facility is not meant to calculate total wages, compensations etc to an employee at SCB Payroll Service. It merely provides salary account and deposit related services to all. BoA doesn’t have any mobile banking facility. On the other hand, SCB has life, home and vehicle insurance premiums not only health insurance. SCB payroll banking doesn’t deduct tax obligations by an individual.

Compared to Redding Bank’s payroll service, SCB has not purchased any such specialized firm to provide solutions. Moreover SCB is providing salary accounts bundled with regular banking needs, not the human resource function of other companies. The purchase of L& L Payroll Service has brought a cost-effective way to serve people. With the help of the service firm the bank can now offer comprehensive payroll management services. But SCB looks for managing total salaries of the companies only which are ways of growing deposits.

The online payroll service of Standard Chartered Bank is totally different than this as it is not performing any such function to calculate weekly total wages or salary. An employer can pay salary via online instruction; an employee can view his overall account and print bank statement. So considering all factors that help create an effective payroll management Standard Chartered Bank has initiated online banking service earlier. The bank’s online payroll service provides an employee to view his account from anywhere in the world after logging in.

Having opposed to a payroll service provider’s client-to-service representative ratio, Standard Chartered Bank has dedicated sales team and relationship managers for multinationals, NGOs, locals, SMEs. Apart from that in each branch, relationship officers are appointed to provide payroll services to the nearest located enlisted company. Since a bank can manage funds more easily and efficiently it is advisable for a company to be enlisted with a bank for managing cash. The bank has accepted newest technology in providing payroll service too. Against all of these services a competitive pricing rate has been scheduled. The interest rates on savings accounts are also competitively charged.

HISTORY OF PAYROLL PROPOSITIONS

Dated back in 2004 when Standard Chartered Bank started its special service for the maintenance of salary accounts. It was known as Corporate Executive Pack (CEP) in which the attributes of products and services were offered. Later in 2006 the package got changed and the new offer was named as Payroll Banking. After that the package was modified and segmented for the purpose of providing segmented products to the companies. In February 2011, the team put a new look and since then called as Employee Banking. It can be inferred that there were several major recommendations, modifications and propositions to serve in the best way.

Process Flow: Opening Payroll Accounts

Step 1: For opening payroll accounts, potential companies are initially approached with a “Letter of Interest” issued by the Wealth Management VC. A draft proposal of “Payroll Offer” is also sent along with this letter.

Step 2: After that concerned official of the said organization then sends a letter, with salary structure of all employees, requesting to open payroll accounts.

Step 3: The eligibility of the mailed organization to open accounts is judged based on the declaration made that organization. After analysis if the organization is deemed to be eligible then payroll sheet is prepared. Minimum total Employee Size is 30 and Payout is BDT 15000.

Step 4: When the approval from all the signatories are taken, two copies of the proposal of “Payroll Offer” is also prepared. Next these copies are sent to the organization. The designated person signs the acceptance for the organization in both the copies. One copy is retained back by the organization and the other is sent to the SCB.

Step 5: Salary accounts for the employees of that organization who meet the criteria will be opened after the receipt of the agreement copy. Existing accountholders need not to open a new account. The concerned official of the organization will send a list of employees including existing and non-existing accountholders.

Step 6: Signed agreement copies will be sent to related units such as CSU, CCU etc by the payroll team. The original copy will be filed under the organization name and kept in the locker by payroll team.

Step 7: Whenever a new agreement is signed, a new company is added, it is the responsibility of payroll team to update the “Payroll Database”. Two lists are maintained: a) List of Payroll Companies & b) List of companies under review.

Step 8: The companies‟ list under Payroll segment will be sent to all related units every month and also whenever any changes are made.

PAYROLL SAVINGS ACCOUNTS

When an employer gets enlisted with Payroll Banking, there will be options to choose from Conventional or Saadiq Current or Savings Accounts. The payroll offers that can be picked up by an employee are given below:

eSavers Account

This is a high interest bearing Savings Account for all Payroll Customers. It has also remote banking solutions bundled with exclusive Customer Value Propositions. Accountholders can use world-class alternate channels for their transactions and also other regular banking needs.

Super Savers Account

This account is suitable for the employees who get a minimum salary of BDT 20000. They will also be provided with additional branch banking facilities.

Current Account

SCB has the perfect non-interest bearing Taka Current Account for an employer and through that account funds can be freely deposited and withdrawn.

Foreign Currency Account

SCB Payroll segment also offers Foreign Currency Account in USD, GBP, and Euro without restriction on transaction frequency for employees drawing salary in foreign currency. The fund remains in that currency and is freely remittable. International Debit Card is also available for FCY Current Accounts in USD. It is also noted that this account is changed in compliance of foreign exchange regulations.

CARDS FACILITY

When an employer is added to payroll banking its employees with get a list benefits including credit cards, debits all with reduced rates. The following is the list of card facilities given by

Standard Chartered Bank Payroll Banking:

Debit Cards

A debit card added with Payroll Service is a smart alternative to cash and makes shopping a lot more convenient. SCB‟s Visa Debit Card is accepted at more than 5000 merchant outlets in Bangladesh and can also be used to withdraw cash at any Visa ATM.

International Debit Card

A Payroll accountholder can access funds from anywhere in the world via International Debit Card. To get this card a Resident Foreign Currency Deposit (RFCD) account is to be opened with a minimum deposit of USD 1000 or a Foreign Currency Account (FCY).

Familink Debit Card

This card is an Add-on card for beloved ones which is complete hassle-free payment solution. Expense Allowances can be provided to family members from an opened account on a monthly basis.

Global Usage Privilege

With this privilege the same SCB Credit Card can be used within and outside Bangladesh.

Card Cheque

This is a chequebook issued from SCB Credit Card for the payment to any person or establishment within Bangladesh and especially when credit card acceptance facility is unavailable.

4-in-1 offer

As a valued credit card holder of SCB a person will get 2 credit cards: Visa and MasterCard within the same limit and can be used both locally and internationally.

Rewards Program

It is a loyalty program given on the usage of credit card. For example, for every TK. 50 spent on credit card an accountholder will earn 1 Treasure Point.

InstaBuys @ 0%

This exclusive service will at 0% rate of interest on InstaBuys on 3, 6, 9 and 12 months at a wide range of partners including electronics and home appliance, jewellery, furniture, hospital, fashion wear, gift shop, computer and many more.

Free Access to Balaka Business Class Lounge Shahjalal International Airport

Waiting hours at Shahjalal International Airport in Dhaka will be enjoyed by using the comfort of Balaka Business Class Lounge at the airport. SCB Platinum or Gold Credit Card and Priority Debit Card give this complimentary access to this lounge.

Accidental Death Insurance

SCB Credit Card gives a free all-accidental-death coverage @ BDT 100,000 for Silver Card, BDT 500,000 for Gold Card and BDT 1,000,000 for Platinum Card in case of accidental death.

Credit Cards

SCB was the pioneer of launching credit cards in Bangladesh over a decade ago. Since then a wide range of credit cards are being offered. Among those Platinum Card, Gold Card and Silver Card can be selected based on salary range if he has Payroll banking account. One year Annual Fee has been waived from newly created accounts. SCB credit cards are giving a lot of attention to create the benefits an employee wants.

Free @ 18

When an accountholder does a minimum of 18 retail transactions using the debit card during the twelve-month period between two annual fee dates will be eligible for 100% waiver on his card’s annual fee.

Exclusive Benefits of a Payroll Account

  • To open a Payroll Account, no initial deposit is required.
  • There is no Account Maintenance Fee for the Payroll Account.
  • There is no such Interest Forfeiture Rule on Salary Accounts.
  • Local Debit Card‟ fee is for lifetime at SCB Payroll Service.
  • Also it has reduced annual fee for Local Debit Card.
  • A complete set of Alternate Banking solutions including 24/7 Contact Centre, ATMs,
  • Bills pay Machine, Internet Banking, eStatement, SMS banking are for free!

Payroll Loan Products

Personal Loan

SCB Personal Loan products are attached with salary package. It helps meet one’s need better. Minimum documentation is required to get loan products.

Loan Limit

Personal Loan

To get this loan no cash collateral or guarantee from employer is required. Loan amount ranges between BDT 50,000 – BDT 1,000,000.

Flexi Loan

Flexi Loan is available with cash collateral. An accountholder will get BDT 1 Million loan with 30% security and BDT 10 Million with 100% security.

Loan Tenor:

Depending on loan amount the period of loan is from 12 months to 60 months, a maximum of 5- year period.

Safety Plus

Safety Plus is the coverage of insurance with loan amount. In case of accidental death or permanent total disability the outstanding loan amount is to be paid by the insurance company if this service is taken. Insurance facility is to be financed as part of the personal loan. But in case of early settlement partial payback is wanted.

Repayment

Interest is calculated on Monthly Reducing Balance Method. The repayment should be in Equal Monthly Installment from the salary account.

Auto Loan

Auto Loan provides a flexible and affordable loan with easy repayment options and all are wrapped in a very convenient package. New, Reconditioned and Second-Hand cars can be purchased from opening salary account with SCB.

Insurance Bundle Offer

There is a special credit card bundle offer of credit card- life insurance and vehicle insurance. Loan outstanding balance is to be paid by insurance company if any accidental death or permanent total disability occurs. Comprehensive insurance for the first year for car loan is also attached to it. The payment schedule is in equal monthly installments. In case of early settlement partial payback is to be done. Interest is calculated on Monthly Reducing Balance Method.

Home Loan

SCB Home Loan provides attractive financing for a new house or an apartment. With this product it can be availed for renovation, extension and furnishing work in the existing house.

Insurance Bundle Offer

There is special value added credit card-life insurance and property insurance. Loan outstanding balance is to be paid by insurance company if any accidental death or permanent total disability occurs. Property insurance is provided for the first year. Repayment is to be in Equal Monthly Installments. Interest payment is based on Monthly reducing balance method.

Islamic Banking – SAADIQ with Payroll

SCB has been offering world-class Shariah Compliant Islamic Banking solutions since 1993 which at present has coverage in 6 countries including Bahrain, Bangladesh, Indonesia, Malaysia, Pakistan and UAE. There is a complete range of financial products under Saadiq Umbrella.

Saadiq Savings / Saadiq eSavers Account

If an accountholder wants to earn profit on savings in a Shariah Compliant manner while enjoying modern banking facilities, Saadiq Savings / Saadiq eSavers Account is the correct solution for him. The products are based on “Mudaraba” concept where the bank places the funds in its pool of Shariah-Compliant assets and the profits from this Islamic Assets are shared between the accountholder and the bank. Profit is calculated on the average monthly balance maintained in the account.

Saadiq Current Account

When fund is deposited in Saadiq Current Account, it can be ensured that the funds will only be used in a Shariah compliant manner. Saadiq Current Account is all about flexibility and convenience for a client.

Saadiq Debit Card

Saadiq Debit card allows an accountholder to withdraw cash at any Visa ATM in the country, as well as at over 5000 merchant outlets in Bangladesh, to make permanent.

Saadiq Credit Card

The Saadiq Visa Credit Card has been carefully developed by international team of Islamic Financial Professionals who ensure that its products are Riba-free. Saadiq Credit Cards operate on the “Ujrah” concept which is based on fixed fee structure.

Priority Banking with Payroll

Priority Banking is the personalized banking services program at Standard Chartered Bank. This service is tailored to offer a company’s employees who draw salary of BDT 200,000 or above. With over 150 years of experience Priority Banking helps assess the financial needs of employees, their families and businesses by offering objective and well researched financial solutions. SCB has the energy and commitment, the competence and experience to understand financial needs.

ALTERNATE CHANNELS FOR PAYROLL

24 –Hour Contact Center

SCB‟s 24-hour contact center is established to provide “one stop solution” for clients banking needs on any day at any time.

ATMs

Payroll accountholders can use SCB Visa card both Debit and Credit at all ATMs carrying the Visa logo to withdraw cash.

Bills Pay Centers

Standard Chartered is committed to provide greater convenience. At SCB branches 24-hour Bills pay Machines are for the convenience of accountholders for cash or cheque deposit and utility bill payments.

Internet Banking

This facility allows a person to bank from anywhere in the world at anytime with total security and confidentiality. E-Statements a unique system has been designed for an accountholder’s convenience to get monthly credit card or account statements via e-mail for free.

SMS Banking

Through this push kind of service the information regarding credit card statement and account’s monthly ended balance as well as range of alerts will be available to mobile phones via SMS for free of cost.

Recommendation

SCB is a well-known International Bank whose services are widely accepted worldwide from traditional banking to Islamic banking. It is high time to make very few changes in the way it operates so that more damage in the form of customer dissatisfaction doesn‟t occur. A set of recommendation is set forth below to improve customer service in all branches, call and contact centers:

Manpower

More trained people are needed in payroll service. The team needs to be bigger so that all companies can ask for solutions, offers and complaints to the respective relationship officers. The database management is still done manually for which few people need to be appointed. The sales team is small for maintaining 447 companies in total.

Help Desk Activation

The inauguration of help desk would dramatically change the way SCB Payroll department used to do. The complaints will easily be stored in database and people will be appointed to answer all queries and send back the major complaints to the department head. This will help reduce total number of complaints over time.

The Interconnectivity

The contact centers, branches, call centers and head office all should be well connected like an ecological web and maintain a balance whenever any complaint arises. One example can be given here: recently in April 2011 a client who is from Middle East was fallen in trap regarding debit card, chequebook and TIN attached with payroll account. He was to send these all via mail. But weeks gone, months passed he was not mailed. Later it was told by SCB officials that his address was wrong but he again checked and found correct. He was then requested to collect this from Dhanmondi 5 branch where he could not find any such parcel. After long days of misunderstanding and irresponsible attitudes from SCB the client received his packet associated with payroll account. The necessity of inter-connected network of problem solving is all wanted by its clients.

Conclusion

To conclude it can be said that as a Market Leader, SCB Payroll Banking has continuously been changing for the betterment of providing services. Listed companies states that the bank has huge potentiality to grab a substantial number of salary accounts in future. In case of service quality and propositions it is the best amongst all payroll service providers in Bangladesh. This service is making contribution to the growth of deposit base of the bank. According to the CAMELS rating it is ranked as Strong or A class bank which is reflected in their quality of payroll service. With its vast operation with newest technology, wide range of products, versatile services, strong financial base, invaluable customer’s satisfaction and profound reputation, it has grown into a unique stature which is subject to everyone’s envy and Standard Chartered Group’s pride.