The principle objective of this report is to analysis Customer Service of IFIC Bank Limited. General objectives of this reports are to present an overview of IFIC Bank, to make an appraisal of customer service of this Bank, to highlight the activities and operations, to find out the customer needs, to find out the customer problems, to make a comparison of service quality with other commercial banks and to meet the terms with the entire branch banking procedures. Finally this report make swot analysis Customer Service of IFIC Bank Limited.
A Summary of IFIC Bank:
IFIC Bank Ltd. is one of those banks that plays important role in the economy of Bangladesh. There is Seventy six Branch of IFIC Bank all over the country. The activities of the branches are more or less same but there are some differences as per the size of the branches. As I was placed to Banani Branch of IFIC Bank as an intern, my focus of the report will be basically on the functions of Banani branch only.
Basically IFIC Bank, Banani Branch always tries to be the right partner for its customers. IFIC Bank is to provide service to their clients with the help of a skilled and dedicated workforce whose creative talents, innovative actions and competitive edge make our position unique in giving quality service to all institutions and individuals that we care for.
Objective of the Report:
The primary objective of this report is to use the theoretical concepts in analyzing real life of Practical Orientation in Banking activities, which is a partial requirement of the BBA program. But the objective behind this study is something broader. The broad objectives of this report are summarized in the following, manner:
- To present an overview of IFIC Bank.
- To make an appraisal of customer service of this Bank.
- To highlight the activities and operations.
- To find out the customer needs
- To find out the customer problems.
- To make a comparison of service quality with other commercial banks.
- To meet the terms with the entire branch banking procedures.
- To scrutinize the performance of the branch as well as IFIC Bank Ltd. as a whole.
- To gain practical experiences and view the application of theoretical knowledge in the real life.
An appraisal of customer service Of the IFIC bank
An Appraisal of Customer Service of IFIC Bank:
Customer service is the most vital factor for any organization. When this question comes about a bank than it becomes more important because a bank is directly involves with its customer. To run the business safe and soundly a Bank must have to maintain a good relation with each and every customer.
Basically a bank provides cash deposit service, utility bills payment service, small finances, corporate or business finance services, loan related services etc. IFIC Bank also provides all this kinds of services for its customers.
IFIC Bank has got that much qualified service team who can provide the best service to the customers and can make the customer a satisfied one.
Products & Service:
- Auto Loan
- Consumer Loan
- Easy Loan
- Porua Loan
- Flexi Loan
- Thikana Loan
- Possession Loan
- Retail Loan
Banks Major Functional Departments & Others Activities:
General banking Division:
There are different types of accounts provided by IFIC Bank for considering the highest benefit of the customers. Such as Savings account (SB), current account (CD), Short term deposit (STD), fixed deposit receipt (FDR) etc are offered by this department. General banking is the heart of banking activities. Total banking procedure start with this department. General banking department perform the core function of bank operation and it is known as “Retail Banking”. They take the deposits from the customer and meet their demand for cash honoring their checks. It opens new accounts, remit funds, issues bank draft and pay order. Account opening section, Remittance, Checks clearing, Cash, FDR, Accounts section are part of general banking.
General Credit Division
A wide range of products and services, such as different type of loans are offered by this department. It faces continuous challenge from the local private banks, which mainly specializes in the consumer banking. As a result, it has to develop new products and services to ease the competition on a continuous basis. The approval is mainly based on the risk analysis of the corporate clients done by the Corporate Banking division.
Finance and Accounts Division
This department performs the following activities:
- Sources of finance
- Administration, audit and back office operation.
- Salary & Provident Fund
- Taking care of taxation and financial control of the Bank.
- Decision making related to administrative activities
Recovery of stuck-up loans is a major concern for the bank. This division helps general credit and project finance divisions to recover the loans and take legal action against those creditors. Some time there is some usual recovery. Recovery from written off loans goes to income account of the bank.
Project Finance Division
IFIC Bank’s corporate clients mainly comprise the top local and multinational companies operating in Bangladesh. The main objective of this department is to build and maintain positive relationships with their clients. As a result, each and every company is assigned a Relationship Manager, who maintains regular contacts with clients. Moreover, this department offers the following facilities to its clients:
- Project Finance.
- Syndicated Loans.
- Bonds and Guarantees, etc.
The foreign exchange and money market operation of the IFIC Bank is broad. Exotic currencies happen to be one of its specials areas of strength. A 24 hour-service is provided to customers in Bangladesh through the Bank’s network of dealing centers placed in the principal of the world. The Bank’s treasury specializes in offering solutions to who wish to manage interest rate and currency exposures that result from trade, investment and financing activities of other dynamic economies of the region.
Internal Control & Compliance
Banking involves high risk, the presence of effective internal control system, corporate governance, transparency and accountability is vital to ensure smooth operation of the bank. The internal control is the process affected to provide reasonable assurance for the achievement of the objectives of the bank, the reliability of financial reporting and compliance with applicable laws, regulation and internal policies.
Audit & Inspection Division
This division helps the bank accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. It also assists development of the process for smooth operation of various department and branches, detect major deficiencies in the branches, review the activities and organizational structure of the internal audit function.
Foreign Trade Division
All the overseas branches are under the control of this division, the regularly communicate with those branches and solve problem of those branches.
It basically handles all promotional campaign, branding both consumer and corporate products and services for IFIC bank.
In Bangladesh local banking laws regulate and rules set by the Ministry of Finance and Bangladesh Bank is handling by this division. Law division has to take care of are:
- Any kind of legal issues
- Compliance advisory service
Account Opening Section:
This section opens Current Deposit (CD), Savings account (SB), Short term deposit (STD), Fixes deposit receipt (FDR). Most vital work starts from here as selection of customer is very important for the bank success and failure. If the account holder do money laundering through this account than the bank will be legally responsible for that and bank has to answer to Bangladesh bank or customer may occur fraud and forgery by this account and thus destroy goodwill of bank’s. In branch account opening officer follow some rules which are guided by IFIC Bank manual and senior opening form signature is must in this case. Manager’s signature is must on every account opening form as permission for opening the account.
Target Customer of IFIC Bank Banani Branch:
|Individual person||Public limited company|
|Sole proprietorship firm||Government Organization|
|Partnership firm||Semi Government Organization|
|Private limited company||Bank employee|
Types of Accounts:
Deposit is life-blood of a commercial bank. Since commercial bank deals with other people’s money, without deposit there is no business for the commercial bank. Accepting deposit is one of the main functions of commercial bank. IFIC bank’s deposits can be broadly classified as follows:
(a) Current Account:
Current Account is most suitable for private, individuals, traders, merchants, importers and exporters, mill and factory owner etc. For opening of a current minimum deposit of TK. 2000.00 is required along with introductory reference. No interest is given the current account deposited money. One can enjoy maximum flexibility and convenience when s/he opens a current account with IFIC bank limited. This account offers:
- Any number of transactions a day
- Free check book
- Statement of account at any desired frequency
- Statement by fax on demand
(b) Savings Account:
The saving account is primarily for small-scale savers. The main objective of this account promotion is thrift. Hence, there is restriction on withdrawals are permitted only against prior,
- Minimum amount of TK. 1000.00 is required as initial deposit.
- Frequent withdrawal is not encouraged.
- 7 days is required for withdrawal of large amount
- The rate of interest is 6.00 % against SB account.
(c) Short-Term Deposit (STD) Account:
In short term deposit account, the deposit should be kept for at least six month to get the interest. The STD account is a very important class of account in this bank. The minimum amount of balance has to be maintained with STD account is TK. 25000 Interest is given at a rate of 4.5 percent which is less than savings account. Normally various big companies, organizations, government departments keep money in STD account. For this type of account, frequent withdrawal is discouraged. Deposit should be kept for at least seven days to get interest. Prior notice is required for the withdrawal of money from STD account. The account holder must give seven days before the withdrawal that is why STD is also called ‘Seven days notice’ current account.
(d) Fixed Deposit Receipt (FDR):
Fixed period specified in advance. These deposits are time deposit. Normally the money on a fixed deposit is not repayable before the maturity date of a fixed period. At the time of opening the deposit account, the banker issued a receipt acknowledging the receipt of money on deposit account. It is popularly known as FDR. An interest rate ranging from 10.50 percent to 11.50 percent is offered depending on different amount and tenure of deposit. Fixed deposits are the deposits in which an amount of cash is deposited in bank.
(e) Business account:
To open an account for Sole Proprietorship, Limited company account, Partnership Company the applicants are required to bring all the materials that have mentioned before. Extra required materials for business accounts is Trade license, TIN number and for partnership & ltd. Company partnership deed is required.
Transfer of an account to another Branch:
Sometimes the customer wants to transfer his account to another branch due to various reasons. IFIC Bank, Banani Branch, also gives this kind of facility to the customer. In this case, they will have to submit an application to the branch manager stating the reasons. The officer verifies the signature and finds out the balance of the account holder. The holder also submits the rest check leaves along with the application. Then the officer issues an Inter Branch Credit Advice (IBCA) to that branch and a debit voucher with the balance of deposit in that account. He also sends the account opening form and specimen signature card to that new branch. The new branch officer verifies the customer signature with account opening form supplied to him. The amount mentioned in the (IBCA) considered as the initial deposit of the new branch.
Cheque book & ATM Service:
The customer service department helps the customer to collect new cheque book as per customer demands. Most of the time customer came to stop a payment of signed cheque by them. Than the customer service offer stop the cheque payment by analyzing the fact. The cheque only can be stopped in two circumstances, if the customer lost the cheque or if the cheque is being stolen. Unless this two circumstances the service provider can not stop the cheque payment. Except this things service officer takes order for new cheque book for the customers. Usually it takes two working days to collect a new cheque book. This is all about cheque book queries.
There are different services for ATM card users like they can apply for new ATM card. The customer can apply for the lost ATM card. The bank for free of charge provides an ATM if its normally being expired. If the customer somehow damages the card than there is a replacement fee of BDT 300 taka to collect a new ATM card and also customer can collect their captured card after 24 hours from customer service department without any fees. Customer can collect their captured ATM card from their nearest branch. This is all about ATM services.
Closing Procedure of an account:
For two reasons account can be closed –
By Banker: banker has the right to close the account if the customer does not maintain any transaction six years and the balance is become lower than the minimum balance.
By Customer: if the customer wants to close his account he will write an application to the manager and the manager give the proper instruction to the officer then close the account.
Firstly, the concerned customer has to apply for closing his/her account. Then to close the account the Cheque book is to be returned to the bank. After charging the account closing charge the Manager will close the account. Closing charges are as follows:
- For below 6 months 100 tk.
- For over 6 months 200 tk.
The rest amount of money laid in the respective account is paid to the customer by a payment order. In case of payment order certain commissions and vat are cut off from the account.
IFIC bank’s locker service allows a customer to keep their valuable in a safe and secured place and access the same at their convenient time.
Locker service offers the following facilities to its customer:
- Friendly and personalized services from the locker custodian.
- Complete privacy: A locker holder can operate the locker in private environment.
- Convenient location of locker complexes.
- Complete safety and security: Locker complexes have the best available security features such as:
- Alert, round the clock security guard.
- Strong, heat-resistant steel lockers lodged in reinforced concrete steel vaults for maximum protection.
- Sophisticated anti-burglary alarm system.
- Highly advanced smoke-sensor devices placed all over the ceiling backed by the fire fighting equipments.
- Protection against varying weather conditions.
But this service is unavailable on weekends and government holidays.
Available locker size and charges:
Any one can open the locker service account. He/She has to deposited 1000/ and need 2 copies passport size picture for opening this account.
Purchase of Sanchaya patra on behalf of a customer:
IFIC Bank is providing the free service for the account holders by purchasing Sanchaya patra on behalf of the customer. If an account holder wants to purchase Sanchaya patra than he or she can apply directly from any branch of IFIC Bank. The fund will be automatically transferred from the account as much as the customer wants to purchase based on the government rules and regulations. The customer can encase this security to refund purpose. The customer also can deposit coupon interest into their account very easily. The bank collects the coupon interest for the customer.
Different types of Queries:
Many customer come to the branch with different types of queries. Most of the common queries are given below:
- To know the account opening process.
- To know about loan facilities.
- To know about the account position.
- To know the balance.
- To know about any fund transfer.
- Enquiry about lost cheque, lost ATM card.
- To know about any returned cheque information.
- How to operate the ATM machine.
- About different charges for different activities regarding account/ card services.
These are the most common queries of the customer. Queries vary according to situation or any other instances.
Cash department is the most vital and sensitive organ of the branch as it deals with all kinds of cash transactions. This department starts the day with cash in vault. Each day some cash that is opening cash balance are transferred to the cash officers from the cash vault. Net figure of this cash receipts and payments are added to the opening cash balance. The figure is called closing balance. This closing balance is then added to the vault. And this is the final cash balance figure for the bank at the end of any particular day.
Cheque Clearing and Remittance Department:
This department receives cheque from its depositors for the purpose of collection by a deposit slip over the counter crediting their account. Clearing of cheque is done through the clearinghouse in Bangladesh bank. Everyday the first house starts at 9 a.m. and returns house at 5 p.m.
The main objective of clearing and remittance department is to provide an extra facility to the customer other than cash receipt and payment. We can divide this department into two parts. One is Clearing & Transfer Delivery section, and the other one is Local Remittance section. In IFIC Bank, Banani Branch, there are three employees, working in this department. I am trying to present my findings in the following parts regarding these two sections.
Inward Transfer Delivery:
For payment of Bills presented to a particular branch of the Bank through another branch of the Bank, the procedures are the same as those applicable to Inward Clearing. The only exception is that there are no clearing house formalities. The concerned branches of the Bank directly deal with Inter-branch clearing.
Outward Transfer Delivery:
For collecting of Bills by a particular branch of the Bank, drawn on another branch of the Bank the procedures are the same as those applicable to Outward Clearing. The only exception is that there are no clearing house formalities. The concerned branches of the Bank directly deal with Inter-branch clearing.
General Instruction on Clearing:
|Step 1||The returns of the outward clearing/ transfer delivery are received by the branch in the same manner as the inward clearing/ transfer delivery (Return of Instruments).|
|Step 2||Depositor’s account is debited with the amount of the instrument.|
|Step 3||The instrument together with the Check Returning Memo in Bank’s form is sent to the depositor with covering memo immediately.|
|Step 4||The instrument together with the Check Returning Memo is sent to the department concerned if lodged by them.|
|Step 5||It the instrument is to be re-lodged, a credit voucher is prepared and attached with it and the instrument is presented again.|
|Step 6||The instruments returned unpaid by the various departments are received in the Clearing Department attached with Memo in standard form and entered in the Register (Inward Clearing Transfer Delivery).|
|Step 7||The returns of inward clearing/ transfer delivery are sent by the branch in the same manner as the outward clearing/ transfer delivery.|
|Step 8||The credit voucher is not posted unless the relative instrument is paid (Internal Transfer).|
|Step 9||If the instrument is returned, the entry is cancelled and initialed in the Transfer Book.|
|Step 10||The instrument together with the Check Returned Memo is sent to the depositor covering memo through Dispatch Department.|
|Step 11||If the amount of the advice received is less than the amount of the instrument received or the amount of the advice sent is more than the amount of the instrument delivered, the excess amount is sent to the Bank concerned by a Pay Order and the following entries are passed (Difference in Clearing):|
Debit: Sundry Deposit A/C- Difference in clearing Credit: Bills Payable A/C- Pay Order issued
|Step 12||If the amount of the advice received is more than the amount of the instruments received or the amount of the advice sent is less than the amount of the instruments delivered, the following entry is passed and the entry is reversed when the Pay Order is received. Debit: Sundry Asset A/C- Clearing Adjustment|
|Step 13||When an instrument is presented in special clearing on request of the customer, the instrument is stamped and suitably endorsed (Special Clearing).|
|Step 14||Such instruments should invariably be drawn on Bank with whom the main branch maintains account (Bangladesh Bank & Sonali Bank).|
|Step 15||Branch sends the instrument duly entered in Outward Clearing Register and Sub-main Schedule to the branch representing the Clearing 1 louse (When representing branch maintains A/C).|
|Step 16||Branch representing the Clearing Mouse sends the instruments to the drawee Bank duly entered in Pay-in-Slip of the Bank for credit of the proceeds in the account maintained with them.|
|Step 17||On receipt of the information of credit of the proceeds from the drawee Bank, the branch representing Clearing House then sends an Inter Branch Credit Advice (IBCA) to the branch concerned.|
|Step 18||Where instruments drawn on Banks other than those, with whom the branch, representing Clearing House does not maintain account, Pay Order/ Bangladesh Bank Check issued by the drawee Bank in payment of the instrument are lodged in clearing.|
Bank’s Locker service is also delivered from this department. In IFIC Bank, Banani Branch, this department is maintained by two officers.
Sending money from one place to another place for the customer is another important service of banks. And this service is an important part of country’s payment system. For this service, people, especially businessmen can transfer funds from one place to another place very quickly. There are five kinds of techniques for remitting money from one place to another place. These are:
- Demand Draft
- Pay Order
- Telegraphic Transfer
- Telephone Transfer
- Mail Transfer – Time consuming and not frequently used
IFIC Bank Ltd. earns a huge amount of money by selling several customer services. The IFIC Bank Ltd. offers the following services to its customer:
Demand Draft (DD):
DD is the most popular instrument of remitting fund. It is an order to pay money drawn by one branch of a bank upon another branch of the same bank for a particular sum of money which is payable to order and demand.
Commission of DD as under:
Postal charge 10/=
Amount of DD Commission (TK)
Minimum charge 25
Payment Order (PO):
A payment order is an instrument from one branch to another of the same bank to pay specified sum of money to the person named therein of his order. Unlike cheque, there is no possibility of dishonoring pay order because before issuing bank takes our money of the pay order in advance.
Amount of DD Commission (TK)
TK 0 to TK. 1000 10
- 1000 to TK. 100000 25
TK 100000 to TK 500000 50
Above TK. 500000 100
Telegraphic Transfer (TT):
TT is the fastest means of money transfer between two branches of the same bank. The formalities of TT is as same as MT, there are taken some extra charge for telephone. Telegraphic and Telephone transfer are almost the same, both are them are known as TT in short. IFIC bank helps people transfer their money from one district to another in the quickest possible time at the lowest service charge.
Banking is essentially a business dealing with money and credit. Like over other business activity, Banks are profit oriented. It depends mainly on how much profit they can make. Profit is the yardstick for the bank to move on. They work as reserves of “savings’ of the community and also as lenders or investors for trade business and industry. A bank invests its funds in many ways to earn income. The bulk of its income is derived from loans and advances.
Banks give loans and advances to traders, businesspersons and Industrialists against the security of some assets or on the basis of the personal security of the borrower. This is the survival unit of the bank because until and unless the success of this section the survival is a question to every bank. If this section is not properly working the bank may become bankrupt. This is important because this is the earning unit of the bank. Banks are accepting deposits from the depositors in condition of providing interest to them as well as safe keeping their interest. Now the question may gradually arise how the bank will provide interest to the clients and the simple answer is advance. Why the bank provides advances to the borrowers –
- To earn interest from the borrowers and give the depositors interest back
- To accelerate economic development by providing different industrial as well as agricultural advances
- To create employment by providing industrial loans
- To pay the employees as well as meeting the interest groups
Credit is continuous process. Recovery of one credit gives rise to another credit. In this process of revolving of funds, bank earns income in the form of interest. A bank can invest its fund in many ways. Bank makes loans and advances to traders, businessmen, and industrialists. Moreover nature of credit may differ in terms of Security requirement, disbursement provision, terms and conditions etc.
Bank often uses loans and advances as an alternative to one another. But academically this concept is incorrect. Academically Advances is the combination such items where loans is a part only. For this credit section of the banks is known as advance section. It is the main profit source of the Bank. Banking business is like all other profit-oriented business. It depends mainly on how much profit they can make. Profit is the yardstick for the bank to move on. Banking is a business that deals only with money and credit. Banks are profit oriented. They invest their fund in many to earn income. Huge amount of income derives from loans and advances. Banks makes loans and advances to traders, businessman and industrialists against the security.
Processing of loan and advances:
Applicant applies for the loan in the prescribed form of bank.
Getting Credit Information:
- Personal investigation
- Confidential report from other bank head office/ Branch/ Chamber of the Commerce.
- CIB report from Central Bank
The loans and advance department gets a form filled by the party seeking a lot of information. The information is listed below:
- Name and address (present and permanent)
- Constitution or status of the business
- Particulars of properties, partners and directors
- Background and business experience
- Particulars of personal assets, names of subsidiaries, percentage of share holding and nature of business
- Details of liabilities in name of borrowers, in names of any directors
- Financial statement for the last three years
- Nature and details of business/ products
- Details of requested credit facilities
- Details of securities offered
- Other relevant information
- Proposed debt equity ratio.
Relevant matter of Document checked before sanctioning any Loan:
- There must be an account of the person want to take loan. The account must transact for not less than 3 months to 6 months. Otherwise the loan will not be sanctioned.
- After checking the duration of account than the transaction made by the account holder must be checked. The debit credit position must be also checked, because it is related with future dealings of the borrower.
- The purpose for what the loan is taken by the borrower is another important matter to see and check. Whether the purpose is business or else must be checked with its marketability. Because there is risk of fraud and forgery by the borrower by seeing one purpose in cash of ding any illegal business.
- The banker should check through security whether it is enough or not.
Proper Supervision of the Project:
If such provision is kept in the sanction contracts the bank officials go the project area and observe how loan is utilized. Of no such close to supervise the loan is added, even the bank can see the performance of the project.
In general the loans are repaid in installment. Some loans are repaid all at a time. If any loan is not repaid in usual cause to action legal procedure is followed to recover the money.
Documentation of the loan:
These are the most common documents for creation of above mentioned charges and for other formalities of sanctioning loan.
- Demand promissory note: Here, the borrower promises to pay the loan as and when demand by bank to repay the loan.
- Letter of arrangement.
- Letter of continuity.
- Letter of hypothecation of goods and capital machinery.
- Stock Report: This report is used for CD and CC. In this report, information about the quality and quantity of goods hypothecated furnished.
- Memorandum of deposit to title of property duly signed by the owners of the property with resolution of Board of Directors of the company owning the landed property.
- Personal guarantee of the owners of the property.
- Guarantee of the all directors of the company.
- Resolution of the board of director to borrow fund to execute documents and completes other formalities.
- Letter of Disclaimer: By this letter, the borrower withdraws his all claim on the claim of the property/ goods lined/ mortgaged.
- Form no. 18/19 for filling charges with the register of joint stock companies under relevant section.
- Tax paying certificate.
- Letter of installment.
Forms of Advance:
Bank generally offers different kinds of credit facilities to their customer. They are in different forms with different categories. The credit facilities may be broadly classified into four categories. They are as follows:
- Cash credit
- Bills purchased and discount
In case of loan, the banker advances a lump sum for a certain period at an agreed rate of interest. The entire amount is paid an occasion either in cash or by credit in this current account, which he can draw at any time. Loan may be demand loan or a term loan. Advance made in a lump sum repayment either on fixed installment basis or in lump sum on subsequent debit except by way of interest, incidental charge, etc. is called a loan.
Types of loans:
The different types of loan that banks give to his party are as following:
- Transport loan
- House building loan
- Staff house building loan
- Loan against trust receipt
- Staff loan against PF (Provident Fund)
- Consumer credit
- LIM (Loan against Imported Merchandise)
- Loan general/Demand loan
Before give loan credit department has to do certain functions. First they have to send CIB to Bangladesh Bank, Lending Risk Analysis, and Issuance of Bank Guarantee after completion of these jobs if the result is positive than officer can sanction loan.
Modes of Charging Security:
A lien is right of banker to hold the debtor’s property until the debt is discharged, bank generally retain the assets in his own custody but sometimes this goods is in the hand of third party with lien marked. When it is in the hand of third party, the third party cannot discharge it without the permission of bank. Lien gives banker the right to retain the property not the right to sell. Lien can be made on movable goods only such as raw materials finished goods, shares, debentures etc.
Pledge is also like lien but here bank enjoys more right. Bank can sell the property without the intervention of any court, in case of default on loan, but for such selling proper notice must be given to the debtor. To create pledge, physical of goods to the bank is must.
In this charge creation method, physically the goods remained in the hand of debtor. But the documents of title of goods are handed over to the banker. The method is also called equitable charge. Since the goods are in the hand of borrower, bank inspects the goods regularly to judge its quality and quantity for the maximum safety of loan.
Mortgage is transfer of an interest in specific immovable property. Mortgage is created on the immovable property like land, building, plant etc. most common type of mortgage is legal mortgage in which ownership is transferred to the bank by registration of the mortgage deed. Another method called equitable mortgage is also used in bank for creation of charge. Here mere deposit of title to goods is sufficient for creation of charge. Registration is not required. In both the case, the mortgaged property is retained in the bank of borrower.
Advanced Against Fixed Deposit Receipts:
Fixed Deposit Receipt
Advance against Fixed Deposit Receipt will be subject to credit restrictions imposed from time to time by Head Office/ Bangladesh Bank. Scrutinize the Fixed Deposit Receipts with regard to the following points:
- The fixed Deposit Receipt is not in the name of a minor.
- The depositor on revenue stamp of adequate value discharges in hand his signature is verified.
- Creation of liability on Fixed Deposit issued in joint names by any one of the depositors is irregular.
- It the deposit receipt is offered as a security for allowing advances, a letter of line shall be obtained from the depositors, on the appropriate form.
- If the deposit receipt has been issued by the branch-allowing advance, line against that specific deposit receipt to be marked in the fixed deposit register of the branch.
- The discharged receipt, the letter of lien duly verified by the issuing branch and the letter confirming registration of the lien on the deposit receipts shall be kept along with other documents under safe custody of the bank.
- Lien on the partial amount of deposit shall not be accepted.
SWOT Analysis: IFIC Bank Limited
The strengths, weaknesses, opportunities and threats of IFIC Bank Limited are noted below as I have found in my analysis.
- Strong capital position of the bank
- Capability to mobilize substantial deposits through various deposit schemes despite low offering.
- Low non-performing assets or classified loans of the bank signify strengths in credit customer selection.
- Ability to maintain positive non-interest margin that signifies efficiency in earning fee incomes.
- Lack of adequate liquidity of the bank
- Management’s inability to converts assets into earnings efficiently which results in decrease in return of assets, return on equity and earnings per share.
- Inability to cope with economic conditions resulted in slower growth of interest earning assets than of interest bearing liabilities. The net effect was decline in operating profit in the recent year.
- Technology integration for automation of business process can gain competitive edge over the others.
- Increasing awareness of Islamic banking can bring more success for Islamic Banking Branches
- The revolution of Information Technology (IT) in the country may lead to success for the bank, as IT sector is a major target area for lending.
- Increased competition in the market for public deposits
- Market pressure for lowering the profit or interest rate
- Volatile global and local economic scenarios
- High concentration in loans as percentage of total deposit may cause severe liquidity problem if significant percentage of loan holder become default.
- The declining return on equity, earnings per share and dividend can give danger signal to the investors.
In order to get competitive advantage and to deliver quality service, top management should to modify the services.
Rectify the Existing Problems:
- As there is no classified loan, branch should monitor the loans & advances closely to avoid classification in future.
- Banani Branch should extend with their all out effort to increase the credit portfolio and to procure more low cash deposit, increase non funded business so as to minimize dependency on interest earning from IFIC Bank general account and to improve overall business performance of the branch to maintain earning.
- When a joint stock company comes to open an account if it’s an existing one, the account opening officer should ask the copies of the Balance Sheet and Income Statement. These will reflect the financial growth of the company and its soundness but in practice bank do not do this. If they have all these that will help them to examine money laundering risk.
- There are numbers of new private banks and some have already activated with their extended customer service pattern in a completely competitive market. Where as IFIC Banani branch is far behind. They are not competitive in customer service because the officers do not behave in professional manner in fort of customer.
- To deliver quality service top management of this breach should try to mitigate the gap between customer’s expectation and employee’s perception and customer’s convenience should give priority.
- IFIC Bank should always monitor the performance of its competitors in the field of Foreign Trade.
- IFIC Bank Ltd. must develop electronic banking system to moderate the service. Technological advantage of a bank ensuring its competitive edge in the market place which can only be achieved by improved technology, efficient manpower and better services.
Customer service is a big factor for a bank to keep the customer happy and satisfied with the services that bank can provide with highest effort. A bank is an intermediary institution, which deposited customer’s money and again invests it to other customers to reach the goal as well as specific objective. A bank can not be able to reach the goal until it makes the customer satisfied by providing services as much as the customer needs.
In this report the importance of customer service has been highlighted. It indicates that the customers are the most valuable assets for a bank. Without having a good number of customers and a good relation with the customer a bank can’t run well in this era because there is huge competition. So I tried to make a relationship scenario of customer with this bank to measure the service quality.
To be the number one bank, there should be a strategy for a bank, that customers are the source of fund and customer should get all the benefits, whish can provide a lot for the customer and as well as can bring a lot for the bank. So each and every strategy should build on the basis of mutual benefit.
After preparing this report it is become easy to say that there should be a goal to make the customer always happy and satisfied with the service, only then a bank can run its business safe and soundly in this competitive era.